please answer step wise, I was unable to understand the previous time.

6. To increase sales from their present annual $24 million, Kim Chi Company, a wholesaler. may try more liberal credit standards. Currently, the firm has an average collection period of 30 days. It believes that, with increasingly liberal credit standards, the following will result: The prices of its products average $20 per unit, and variable costs average $18 per unit. No bad-debt losses are expected. If the company has a pre-tax opportunity cost of funds of 30 percent, which credit policy should be pursued? Why? (Assume a 360-day year.) (CILO 3)