a. Use the information below to answer the questions below. Suppose your company is considering relaxing its current credit policy. Currently, the company's annual sales (total revenue) are RM16 million and the average payback period is 30 days. The company is considering changing the credit terms from the current net amount of 30 to 1/30 net of 60. This change is expected to bring in additional sales of RM2 million. The company's variable cost is 75% of the selling price. The information provided here and other information are summarized in the table below. (5 marks)

New sales (all credit)	RM 18,000,000
Original sales (all credit)	RM 16,000,000
Contribution margin	25%
Percent bad debt losses on new sales	6%
New average collection period	45 days
Original average collection period	30 days
Additional inventory investment	RM 50,000
Pre-tax required rate of return	15%
New percent cash discount	1%
Percent of customers taking the discount	50%

If the credit policy change is made, the change in: i. The bad debt losses: ii. The profit: iii. The additional investment in accounts receivable: iv. The cost of the additional investment in accounts receivable and inventory: v. The change in the cost of the cash discount: 

b. You are the credit manager of Z company. Recently, the company asked you to analyze the current credit policy and propose a new credit policy within 3 months. What factors determine the length of the credit period? And what factors should you consider in detail when analyzing changes in credit policy? (5 marks)

c. A pizzeria in downtown Changloon is trying to determine the best order quantity for its pizza ingredients. The pizzeria believes it will sell 14,400 pizzas at an average price of RM8 per year. The store buys the ingredients for one pizza at a rate of RM1.50, and the storage cost for each pizza is RM0.80. The cost of ordering more ingredients is RM13. i. Determine the economic order quantity. (3 marks) ii. What would be the total costs for ordering the ingredients one, and five times a year? (2 marks)