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ABC is considering relaxing its credit standards. It expects sales to increase by 20% from $10 million.

8. ABC is considering relaxing its credit standards. It expects sales to increase by 20% from $10 million. The ACP will increase from 35 to 50 days, and bad debts are expected to increase from 2% of sales to 7%. Variable costs are 60% of sales, and fixed costs are $3.5 million a year. The opportunity cost is 16%. Assume a 365 day year. Determine the net profit or loss from the decision

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