Nines $($Pty$)$ Ltd $($Nines$)$ is a clothing manufacturer and retailer located in Johannesburg, South Africa. The financial year end of Nines is $30$ April. Nines is currently deciding whether to alter the entity$$s credit policy from $3/10$ net $40$ to $5/10$ net $30,$ in order to reduce the bad debt from the current $8\%$ of credit sales that do not settle early, to $4\%.$ Currently, two$-$thirds of the customers who purchase on credit, make use of the early settlement discount offer. Should the credit policy be changed, it is expected that $55\%$ of customers who purchased on credit will then make use of the early settlement discount. Sales are expected to be reduced by $12\%$ as a result of the change, whereas both the current opportunity cost of $11\%$ as well as the gross profit margin are expected to remain unchanged. $36\%$ of all sales are credit sales and this is also expected to remain unchanged. Nines$$ financial manager has provided an extract of the $2025$ financial year accounting records, which may be assumed to be correct: Statement of financial position as at $30$ April $2025$: raw materials R$402000,$ work$-$in$-$progress R$116000,$ finished goods R$388000,$ trade payables R$627000,$ Statement of profit or loss and other comprehensive income for the year ended $30$ April $2025$: sales R$5800000,$ cost of sales R$1930000,$ purchases R$875000.$ It may be assumed that there are $365$ days in a year. Nines is not a registered VAT vendor. REQUIRED: Advise Nines $($Pty$)$ Ltd in deciding whether the entity should change its credit policy by calculating the effect of the change on the annual net profit.