(d) LITE Ltd. currently provides 30 days of credil its customers. Its present level of...
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(d) LITE Ltd. currently provides 30 days of credil its customers. Its present level of sales is Rs. 50 Lakhs. The company's cost of capital is 10 percent and the ratio of variable costs to sales is 0.85 . the company is considering extending its credit period to 60 days. Such an extension is likely to push sales up by Rs. 5 Lakhs. The bad debt proportion on additional sales would be 7 percent. The corporate tax rate is \30. Should the company extends its credit period? Why? Show all calculations
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