As treasurer of the Universal Bed Corporation, Aristotle Procrustus is worried about his bad debt ratio, which is currently running at 6%. He believes that imposing a more stringent credit policy might reduce sales by 5% and reduce the bad debt ratio to 4%. If the cost of goods sold is 80% of the selling price, should Mr. Procrustus adopt a more stringent credit policy? Calculate and explain

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As treasurer of the Universal Bed Corporation, Aristotle Procrustus is worried about his bad debt ratio, which is currently running at 6%. He believes that imposing a more stringent credit policy might reduce sales by 5% and reduce the bad debt ratio to 4%. If the cost of goods sold is 80% of the selling price, should Mr. Procrustus adopt a more stringent credit policy? Calculate and explain
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