INSTRUCTION: ANSWER ALL QUESTIONS QUESTION 1 (a) Nanania Sdn Bhd is considering the changes in credit policy of the firm. All sales are on credit. Nanania Sdn Bhd credit sales amounted to RM2,500,000 for current year. Nanania Sdn Bhd is deciding whether to loosen its credit standard, which will increase unit sales by 10% and increase average collection period from 25 days to 35 days. It will increase bad debt from 1% to 2% of sales. The ratio of variable cost is 70% while the required rate of return before tax is 12%. If the new policy is implemented, the company will have to increase inventory capacity of RM50,000 to cover the increase in sales. You are required to: (i) Analyze the changes in credit policy based on the information given. (C4) (13 marks) (ii) Should changes in credit policy be implemented? Determine your answer. (C4) (2 marks) (b) Determine the annualized opportunity cost of foregoing the cash discount under each of the following terms of sale (assume there are 365 days in a year). (C4) (i) 3/12 net 40 (3 marks) (3 marks) (ii) 4/15 net 90 (c) Apan Enterprise sells 45 000 units of products per year. Carrying cost is RM2 per unit, while the ordering cost is RM50 per order. Find the Economic Order Quantity. (C4) (4 marks)