management of receivables - early settlement discount

A Co has a turnover of $ 900,000 (90% of which is on credit) and receivable days are currently 42 days despite the company only offering 30-days credit. A Co finances its receivables using its overdraft which has an annual interest cost of 8% and has a contribution margin of 30%. A Co is considering the introduction of an early settlement discount at the same time as extending their standard credit terms to 50 days. The Co would offer customers a 1% discount for payment within 14days. it is anticipated that 40% of customers will take the discount, while those that do not take the discount will keep the new standard credit terms. As a result of the extended credit terms, credit sales are expected to rise by 10%. Due to extra administration involved it is thought that administration costs will rise by $ 10,000 per year. Evaluate whether or not A Co should offer the discount.