Z Ltd has annual credit sales of $1,500,000 and an average collection period of 45 days. The entity intends to change its credit terms from net 30 to 2.0/10 net 30. This proposed change is expected to reduce the average collection period by fifteen days. As much as 25% of Z Ltds customers are expected to take advantage of the 2% discount. Z Ltds bad debts are negligible and are expected to remain so regardless of the proposed change. Z Ltd requires a 14% return on its investments.

Weighing up the opportunity cost and the expected savings of the proposed change, should Z Ltd accept or not accept the proposed change?