4. X Ltd has current annual sales of 60 crore and an average collection period of 30 days. The company is considering of liberalizing its credit policy. If the collection period is extended, sales and bad debt are expected to increase in the following way: Increase in Increase in Collection Sales Per cent Bad Credit Policy Period (crore) Debt Losses I 15 days 4.0 1.5 II 30 days 4.5 1.7 III 45 days 5.3 2.0 IV 60 days 6.5 2.5 The fit 10 per unit. sells its product for Average cost at current level of sales is 90 per cent for sales and variable cost is 80 per cent of sales. If the current bad debt loss is 1.5 per cent. of sales and the required return is 18 per cent, which credit policy should be pursued? (Assume a 360-day year). State your assumptions.