RST Limited is considering relaxing its present credit policy and is in the process of evaluating two proposed policies. Currently, the firm has annual credit sales of Rs.225 lakhs and accounts receivable turnover ratio of 5 times a year. The current level of loss due to bad debts is Rs.7,50,000. The firm is required to give a return of 20% on the investment in new accounts receivables. The company's variable costs are 60% of the selling price. Given the following information, which is a better option? Annual credit sales (Rs) Accounts receivables turnover ratio Bad debt losses (Rs) Present Policy 225 5 7.5 Policy option 1 275 4 22.5 Policy option 2 350 3 47.5