A firm’s current sale is Rs 10,00,000, It plans to introduce a cash discount policy of 2/10 net 30. As a consequence, the average collection period is expected to reduce by 10 days and 80% of the...

A firm’s current sale is Rs 10,00,000, It plans to introduce a cash discount policy of 2/10 net 30. As a consequence, the average collection period is expected to reduce by 10 days and 80% of the customers are expected to opt for discount. If the required rate of return on investment in B/R is 20%, find out whether the new policy should be introduced.