The Dunstill company has obtained the following information:
· Annual Credit Sales= 30 million
· Collections period is= 60 days
· Credit terms= Net 30 days
· Interest rate = 12%
The company is considering changing it's credit terms to 4/10 net 30. The company anticipates 50% of the customers will take advantage of this policy and that the collection period will drop by 30 days. Should the company make this change?