X Ltd. has annual sales of 10,000 units at $300 per unit. The annual fixed costs amount to $300,000. The variable cost is $200 per unit. The current credit period is 1 month. The company is considering a proposal to increase the credit period.

	Existing	Proposed
Credit period (month)	1	2	3
Increase in sales (per cent)	-	5	30
Bad debts (per cent)	1	3	5

Fixed cost will increase by $60,000 on account of increase in sales beyond 25% of present level. The company plans a pre-tax return of 15% on investment in receivables. You are required to calculate the most paying credit policy for the company. Provide in-text citations and explain your work in detail.