Initiating a cash discount. Gardner Company currently makes all sales on credit and offers no cash discount. The firm is considering offering a 1?% cash discount for payment within 15 days. The? firm's current average collection period is 60 ?days, sales are 40,000 ?units, selling price is ?$45 per? unit, and variable cost per unit is ?$33. The firm expects that the change in credit terms will result in an increase in sales to 44,000 ?units, that 70?% of the sales will take the? discount, and that the average collection period will fall to 30 days. If the? firm's required rate of return on? equal-risk investments is 25?%, should the proposed discount be? offered?
?(Note?: Assume a? 365-day year.)