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Shortening the credit period ---------- A firm is contemplating shortening its credit period from 40 to...

Shortening the credit period ---------- A firm is contemplating shortening its credit period from 40 to 30 days and believes​ that, as a result of this​ change, its average collection period will decline from 45 to 38 days. Bad-debt expenses are expected to decrease from 1.6% to 1.1% of sales. The firm is currently selling 12,500 units but believes that as a result of the proposed​ change, sales will decline to 10,600 units. The sale price per unit is $57​, and the variable cost per unit is $44. The firm has a required return on​ equal-risk investments of 12.7%. Evaluate this​ decision, and make a recommendation to the firm. (Note​: Assume a​ 365-day year.)

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As their is net loss we should not opt the proposal

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