The point at which the incremental cost of investing in accounts receivables is just offset by the cash inflows created by the incremental sales is the point at which the firm has achieved the optimal:

Question

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The optimal credit policy is achieved when the additional costs of extending more credit (investing in accounts receivables) are exactly offset by the additional revenues generated from the incremental sales that result from that credit extension. This balance maximizes the profitability associated with credit sales.

The Point at Which the Incremental Cost of Investing in Accounts