Please find the below attached question and give the answer properly.

2. A company deals with consumer durables, having an annual turnover of Rs. 80,00,000, 75% of which are credit sales effected through a large number of dealers while the balance sales are made through show rooms on cash basis. Normal credit allowed is 30 days. The company proposes to expand its business substantially and there is good demand as well. However, the marketing manager finds that the dealers have difficulty more stocks due to financial problems. He therefore proposes a change in the credit policy as follows: Proposal Credit period (Days) Anticipated credit sales in Rs. Lakhs) A 60 70 B 90 75 The products yield an average contribution of 25% on sales. Fixed cost amount to Rs. 5,00,000 per annum. The company expects a pre-tax return of 20% on capital employed. The finance manager after a review of the proposal has recommended increasing the provision for bad debts from the current 0.5% to 1% for proposal A and to 1.5% for proposal B. Evaluate the merits if the new proposals and recommend the best policy