Zest Ldd$\text{'}$s $2025$ sales $($all on credit$)$ are projected to be $$1,095,000.$ Tbe sales projection is based on the company's cument credit terms of $\frac{2}{12},$ net $30.$ Its current mvernge collection period is $25$ days. with $70$ percent currently taking up the discount. Management is not happy with the projected sales, and has sought ways for improvements. The sales manager has estimated that with terms of $\frac{3}{15},$ net $42,2025$ sales would jump to $$1,460,000$ and $60$ percent of sales would take the discount. However, the average collection period would increase to $40$ days. Zest will maintain its contribution margin of $7$ percent. Its sbort$-$term finascing cost and long$-$term financing cost are $6$ percent and $10$ percent respectively.

Required:

In order to assess whether Zest should initiate the change in credit policy, calculate:

the incremental contribution $[4$ marks$)$

the incremental investment in accounts receivable $[6$ marks$]$

the overall impact on operating income $[8$ marks$]$