Question: [2 marks] (b) average collection period from 30 days to 2100 net 40 days. The relaxation in credit is Ajwa Trading Sdn Bhd is considering

[2 marks] (b) average collection period from 30 days to 2100

[2 marks] (b) average collection period from 30 days to 2100 net 40 days. The relaxation in credit is Ajwa Trading Sdn Bhd is considering changing its credit policy that will result in CL02 C3 expected to produce increase in sales. It is estimated thal 90% of its customers will take the discount offer and the rest will pay on day 40' You are given the following additional information: Original credit sales RM20,000.000 New credit sales RMSD,000.000 Contribution margin 25% Percentage ol'bad debts on additional sales 5% Additional inventory required RM700,000 Required rate of return 15% Assume Sou-day a year You are required to: i. Calculate the changes in credit policy based on the information given ii. Examine whether changes in credit policy should be implemented? [1.54%513Wi I\" cl :3

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