Which of the Following Conditions Must Exist for a Firm

Multiple Choice

Which of the following conditions must exist for a firm to make a change in its existing credit policy?

A) Days sales outstanding (DSO) must decline if the new policy is implemented.
B) Bad debts must decrease if the new policy is implemented.
C) The new policy's net present value (NPV) must be both positive and greater than the existing policy's NPV.
D) Sales must increase if the new policy is implemented.
E) The firm's variable costs should decrease if the new policy is implemented.