Questions Mark Acompany is thinking about changing itu credin policy to spend up in collection. The w policy would call for ano, at 50 cash discours where 60 tisuren Spected to take up the discount is further with a demoes would increase lo 0.00, tai price of 520 w wierk of the cars in pelle The se non carried by the team is towed on seconde quantity 0) The origix 5200 per or the curricul $150 perni, hech in inventary incur an www cost of $12. The colocande de la Sole Sales Opvos represent is of our of wood Actress rowka average inwesty underlying the old policy are $27.00 52.00, regreclively Wunderlines 14% of the credince in the create and mory balonces. The l'in is in a 40% sur brake Required: Based on the percentage change in crisantero (EAT) between the and the new discours polky should the firm accept the proposed sems Assured under the al policy to be $117.000. Use a 300-day year. Dinesandarunding diffimenes Question I (15 Marks) A company is thinking about changing its credit policy to speed up its cash collections. The new policy would call for a 3/10. net 50 cash discount, where 60% of its customers are expected to take up the discount. It is further anticipated that annual dollar sales would increase to $600,000, at a selling price of $20 per unit, as a result of the change in policy The average inventory carried by the firm is based on an economic order quantity (EO) The ordering com is $200 per order and the currying cost is $1.50 per unit, where each unit in inventory incurs an average cost of $12. The cost of goods sold equates to 65% of sales. Operating expenses represent 15% of cost of goods sold. Accounts receivable and average inventory underlying the old policy are $27.000 and $12,000, respectively. Interest expense underlines 14% of the combined increase in the accounts receivable and inventory balances. The firm is in a 40% tax bracket Required: Based on the percentage change in camings after taxes (EAT) between the old and the new discount policy, should the firm accept the proposed terms? Assume that EAT under the old policy to be $117.000. Use a 360-day year. Disregard rounding differences