In an Analysis of Alternative Credit-Management Policies, Which of the Following

Multiple Choice

In an analysis of alternative credit-management policies, which of the following components will cause the net present value of receivables on credit sales to increase, if everything else remains constant?

A) A tougher collections policy that reduces the bad debt loss ratio.
B) A higher cost per unit sold.
C) A longer average collection period.
D) An increase in the cost of capital.