=+8. Pincer plc is hoping to increase sales by granting its customers longer payment periods. Its annual sales currently stand at

€1m and it gives its customers an average of 30 days to pay.

The company made the following assumptions when defining its customer credit policy:

Extension of payment period Increase in sales 15 days €40 000 30 days €60 000 45 days €70 000 60 days €75 000 The sales price of a manufactured unit is €4 and the cost price is €3.2, including €1 in fixed costs. What policy should the company introduce if it requires a 20% return (before tax) on its capital invested (its inventories are financed through supplier credit)?