Mooney Magical Mirror Manufacturing (4M not to be confused with 3M) presently

Mooney Magical Mirror Manufacturing (4M not to be confused with 3M) presently sells 20000000 units per year at a price of $60 per unit with per unit variable costs of $50 per unit. The
company%u2019s average collection period is presently 36 days despite offering terms of net 30. It%u2019s bad debt expense is presently 0.5% of
annual sales. In an effort to possibly increase sales but more importantly speed up collection the firm is considering changing its credit
terms to 2/10 net 30. They estimate that sales will only increase by 2% as
a result of the change since many of its competitors offer similar credit terms. It does expect however that 60% of its total sales will take advantage of the discount and in doing so will reduce the average
collection period to 15 days. Furthermore it is expected that the bad debt
ratio will fall to 0.3% of sales. The firm%u2019s cost of capital is
14%. Given this information
should Mooney Manufacturing change its credit terms? Explain why supporting your answer with numerical justification.