Shortening the credit period A firm is contemplating shortening its credit period from 45 to 35 days and believes that, as a result of this change, its average collection period will decline from 49 to 42 days. Bad-debt expenses are expected to decrease from 1.5% to 1.1% of sales. The firm is currently selling 11,700 units but believes that as a result of the proposed change, sales will decline to 9,800 units. The sale price per unit is $57, and the variable cost per unit is $43. The firm has a required return on equal-risk investments of 11.9%. Evaluate this decision, and make a recommendation to the firm. (Note: Assume a 365-day year.)