Answer (D) is correct . Increasing the quality of the accounts rejected means that fewer sales will be made. The company is therefore not trying to maximize its sales or increase its bad debt losses. The objective is to reduce bad debt losses and thereby maximize profits.
Answer (A) is incorrect because Tightening credit will reduce sales.
Answer (B) is incorrect because Tightening credit will reduce bad debt losses.
Answer (C) is incorrect because Most likely, higher quality accounts will mean a shorter average collection period.
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