Seven Wings Ltd. has been engaged in manufacturing of garments. It has current sales of ₹30 lakh per annum. The cost of sales is 75% of sales and bad debts are 1% of sales. The cost of sales comprises 80% variable cost a

Seven Wings Ltd. has been engaged in manufacturing of garments. It has current sales of ₹30 lakh per annum. The cost of sales is 75% of sales and bad debts are 1% of sales. The cost of sales comprises 80% variable cost and 20% fixed cost while the company's required rate of return is 12%. The company currently allows customers 30 days credit. But the company is now considering increasing the credit period to 60 days credit in order to attract more customers. It has been estimated that this change in policy will increase sales by 15% while bad debts will increase from 1% to 4%. It is expected that the policy change will not result in any increase in fixed cost, creditors and stock level. Should Seven Wings Ltd. introduce proposed policy?