Mike also wanted to investigate the option of changing the company’s credit policy to 5% COD net 30. He believed that the increased discount would boost sales by 8% and eliminate the potential for late paying customers to take the discount. He felt that 40% of all sales would be cash and, therefore, would receive the discount. That policy was expected to reduce the average daily collection period for all credit sales to 65 days. Because increased sales would come from people paying early, bad debt as a percent of sales was expected to decrease to 5.6%.