3. The Syntex Company is planning to relax its credit policy to motivate customers to buy on credit terms of "net 30". It is expected that the variable costs will remain 75 per cent of sales. The incremental sales are expected to be on credit basis. For the perceived increase in risk in liberalizing the credit terms, the company requires higher required return. If the following is the projected information, which credit policy should the company pursue?

Credit Policy Required Return Collection New Sales Period R) A 20% 40 600,000 B 25% 45 500,000 C 32% 55 400,000 D 40% 70 300,000