Accounts receivable changes Tara's Textiles currently has credit sales of $25 million per month, an average...

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Accounts receivable changes Tara's Textiles currently has credit sales of $25 million per month, an average collection period of 62 days, and bad debts equal to 4.5% of sales. Assume that the price of Tara's products is $57 per unit and that the variable costs are $52 per unit. The firm is considering tightening up their credit policy, allowing customers 40 days rather than 62 to pay their bills. With a stricter credit policy in place, sales will fall by 10%, but the average collection period will drop to 40 days and the bad debts percentage will fall to 1%. Determine whether the company should make this change if their cost of capital is 1.2% per month. (Note: Use a 365-day year.) The cost from a decrease in sales is $ (Round to the nearest dollar.) The additional profit from the decreased marginal investment in A/R is $ The additional profit from the decrease in bad debts is $ (Round to the nearest dollar.) (Round to the nearest dollar.) The net profit or loss from implementing the proposed plan is $ Is the proposed plan recommended? (Round to the nearest dollar. Enter a negative number for a loss.) (Select from the drop-down menu.) Accounts receivable changes Tara's Textiles currently has credit sales of $25 million per month, an average collection period of 62 days, and bad debts equal to 4.5% of sales. Assume that the price of Tara's products is $57 per unit and that the variable costs are $52 per unit. The firm is considering tightening up their credit policy, allowing customers 40 days rather than 62 to pay their bills. With a stricter credit policy in place, sales will fall by 10%, but the average collection period will drop to 40 days and the bad debts percentage will fall to 1%. Determine whether the company should make this change if their cost of capital is 1.2% per month. (Note: Use a 365-day year.) The cost from a decrease in sales is $ (Round to the nearest dollar.) The additional profit from the decreased marginal investment in A/R is $ The additional profit from the decrease in bad debts is $ (Round to the nearest dollar.) (Round to the nearest dollar.) The net profit or loss from implementing the proposed plan is $ Is the proposed plan recommended? (Round to the nearest dollar. Enter a negative number for a loss.) (Select from the drop-down menu.)