company's required rate of return on investment in receivables is 20%. The company expects to spend an incremental collection cost of PZUDJTDEI to undertake his change in credit policy. The prevailing average market rate of investments is 15% per annum. Customer's defaults in payments are expected to reach 3% on total sales as compared from a minimal 1.5% based on the present credit terms. Requiredhould the company extend its credit period? {Assume a BEG-day year.} Change in credit policy.Silverstone Corporation has a 12% opportunity cost of funds and currently sells on terms of net ll}. EDM. This means that goods shipped before the end of the month must be paid for by the tenth ofthe following month. The rm has sales of Pl million a year. which are SD percent on credit and spread evenly over the year. Currently the average collection period is