A fiRm in a Competitive Industry Institutes a Change in Credit

A firm in a competitive industry institutes a change in credit policy that allows buyers more advantageous terms. The firm also drops its prices by 5%. Unless ____________, the change will
Almost certainly be a negative NPV investment.

A) Total costs fall.
B) Most of the seller's costs are variable costs.
C) The seller is planning to offer a cash discount.
D) Sales increase.
E) Customers actually take advantage of the new terms.