Competitive Mesh Shirts Competitive Mesh Shirts Is Considering a Plan to Ease Its

Competitive Mesh Shirts
Competitive Mesh Shirts is considering a plan to ease its credit terms in order to generate greater revenues. Last year, Competitive had sales of 1,000,000 units at a price and variable cost of $20 and $15, respectively. Its current average collection period is 20 days and its percentage of bad debt expense is 2% while it required return on investment is 10%. If Competitive were to ease its credit terms, the firm anticipates that its sales would increase to 1,200,000 units without a change in price or variable costs. However, the average collection period is expected to increase to 30 days and bad debt expense is expected to increase to 3%.
-What is Competitive's net profit for the credit decision at hand?

A) $1,000,000.00
B) $614,246.50
C) $320,000.00
D) $65,753.50