incorrect answer straight away down vote.... don't copy answer from Chegg...all are incorrect...

I will report against your answer

". PQR Ltd. having an annual sales of 30 lakhs, is re-considering its present collection policy. At present, the average collection period is 50 days and the bad debt losses are 5% of sales. The company is incurring an expenditure of 30,000 on account of collection of receivables. Cost of funds is 10 percent. The alternative policies are as under: Alternative Alternative II Average Collection Period 40 days 30 days Bad Debt Losses 4% of sales 3% of sales Collection Expenses 360,000 395,000 Evaluate the alternatives on the basis of incremental approach and state which alternative is more beneficial