Lewis Lumber is considering changing its credit terms from net $55$ to net $30$ to bring its terms in line with other firms in the industry. Currently, annual sales are $$324,000,$

and the average collection period $($DSO$)$ is $54$ days. Lewis estimates tightening the credit terms will reduce annual sales to $$318,000,$ but accounts receivable would drop to

$32$ days of sales. Lewis' variable cost ratio is $70$ percent and its average cost of funds is $15$ percent. Should the change in credit terms be made? Assume all operating costs

are paid at the time inventory is sold and al$/$ sales are collected at the DSO. Assume there are $360$ days in a year. Do not round intermediate calculations. Round your

answers to the nearest cent.

The NPV for the existing credit policy, that is $

is

the NPV for the proposed credit policy, that is $

$.$ Thus, Lewis Lumber

change its credit policy.