relaxation of credit standards Louis Enterprises is considering relaxing it's credit standards to increase it's currently sagging sales.

As a result of the polls relaxation sales are expected to increase by 20% from 15,000 to 18,000 units during the coming year the average collection. Is expected to increase from 50 to 60 days and bad debt are expected to increase from 3% to 4.5% of sales.

The sale price per unit is $42 and the variable cost per unit is $33 the firms required return on equal missed investments it's 9.5% evaluate the proposed relaxation and make a recommendation

Note assume a 365 day year