Bisikel, Inc. is a bicycle manufacturer that currently makes all sales on credit and does not offer a cash discount. The company is considering a 3% cash discount for payments made within 10 days. The company's current average collection period is 90 days, its annual sales are 400 bicycles, the selling price is $25,000 per bicycle, the variable cost per bicycle is $18,750 per film, and the average cost per bicycle is $21,000. The company anticipates that the credit terms change will result in a minor increase in sales of 10 bicycles per year, that 75 percent of sales will take the discount, and that the average collection period will be reduced to 30 days. Under the proposed plan, the firm's bad debt expense is expected to become negligible. The bad debt expense is currently 0.5 percent of sales. The firm's required return on equal-risk investments is 20 percent