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2. Ratna Ltd. is consider to relax its credit policy as a result of which the annual sales of the company would increase from 2,00,000

2. Ratna Ltd. is consider to relax its credit policy as a result of which the annual sales of the company would increase from 2,00,000 to 2,50,000. The fixed cost would remain * 8,000 whereas the bad debts would increase from 2% to 3%. The receivable turnover ratio would decrease from 12 times to 10 times. The PV Ratio currently is 20%. Advise whether the proposal shall be accepted if the firm's required rate of return is 15%

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