Wilder corporation is considering granting credit to

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Wilder Corporation is considering granting credit to currently limited customers or no-credit customers. The following information is given:

Category

Bad Debt

Percentage

Collection

Period

Credit Terms

Incremental Annual Sales

Accompanying

Relaxation in Credit

Standards ($)

A

3

20 days

Full

250,000

B

6

45 days

Restricted

540,000

C

10

90 days

No credit

800,000

Gross profit approximates 12 percent of sales. The rate of return is 18 percent. Should credit be extended to categories B and C?

Reference no: EM13484451

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