Wilshire Products generates $30 million in credit sales on the basis of its net 20 credit policy. In an effort to increase market share, the firm is considering changing to a net 30 credit policy. Wilshire expects the shift will result in a $5 million increase in credit sales, and an increase in its average collection period from 32 days to 47 days. Wilshire also expects its bad-debt losses to increase from the current 3% level to a new 4% level. Wilshires profit ratio is 15% and its required return on A/R is 14%. Should Wilshire lengthen its credit period?

Question options:

	a) Yes, the difference between marginal benefits and marginal costs is $250,000
	b) No, the difference between marginal benefits and marginal costs is ($12,740)
	c) Yes, the difference between marginal benefits and marginal costs is $512,740
	d) No, the difference between marginal benefits and marginal costs is ($55,430)