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Use the following information to answer the following question(s) Assume mat your firm is considering relaxing its current credit policy Currently the firm has annual
Use the following information to answer the following question(s) Assume mat your firm is considering relaxing its current credit policy Currently the firm has annual sales, ail credit, of $16 million and an average collection period of 30 days The firm is considering a change m credit terms from the current terms of net 30 to 1/30 net 60 The change is expected to generate additional sates of $2 million The firm has variable costs of 75% of the selling price The information provided here. plus additional information, is summarized the table below. It the credit policy change is made, the net effect (i.e.. incremental revenues versus incremental costs) will be Select one: $375.000 $266,000 $145.000 $85.000.]
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