BPP Example: chapter 5: Extension of credit

E Co currently expects sales of $50,000 a month. VC of sales are $40,000 a month. If cr period increased for 30 days to 60 days , sales volume would increase by 20%. All customers would take advantage of the extended credit. If cost of capital is 12.5% a year, is the extension of credit justifiable?

BPP Answer:
increase in AR= 120,000-50,000=$70,000
financing = 70,000x 12.5%= $8,750
annual contribution= 12 months x 20% x $10,000=24,000
annual net benefit of extending credit= 24,000-8,750=15,250

what i do not understand:
the increase in AR of 70,000 is over a 2 month period (60 days), however the financing of 12.5% is for a whole year. Therefore I was thinking that it would have been [70,000 x 12 months /2] x 12.5%

Please explain. Thanks.