Zaidan manufactures various electrical connectors. The companys sales budget for the first six months of the coming year is as follows: All sales are made on credit.

	January	February	March	April	May	June
Budgeted sales	$540,000	$475,000	$580,000	$625,000	$560,000	$600,000

Zaidan is planning to change its credit policies in the coming year. For the first time in its history, the company is offering a 2% discount to customers who pay within 15 days of the invoice date. Based on industry trends, Zaidan estimates that this change will result in 50% of credit sales being paid within the discount period; another 15% of sales, within the month of sale (but outside of the discount period); and another 32% of sales, during the month after the sale. An estimated 3% of sales will be uncollectible.

Required:

1. Prepare Zaidans cash receipts budget for the second quarter of the coming year.
2. How much the cash will Zaidan sacrifice in the second quarter by offering the new discount?
3. What do you think led Zaidan to offer the new discount to customers?