QUESTION 2 A. E&E Repairs is trying to decide whether it should relax its credit standards. The firm repairs 60,000 carpets per year at an average price of $30 each. Bad debt expenses are 2% of sales, the average collection period is 45 days and the variable cost per unit is $26. If credit standards are relaxed, the company expects that bad debts will increase by 0.25% of sales and the average collection period will increase to 55 days but sales will increase by 6,000 repairs per year. Required: If the company's required rate of return on investments is 15%, what would you recommend the company to do to relax its credit standards? (10 marks)