exam kit question

in an attempt to improve the liquidity position of a company, the company is considering offering an early settlement discount to its customers. which of the following would be the outcome of offering early settlement discounts? a-sales increase b-administrative costs decrease c-bad debts increase correct answer: sales increase. Sir my doubt is why will the administrative costs not decrease? as bad debts are a part of administrative expenses, so the fact remains that early settlement discounts would offer the customers a chance to pay early at reduced rates would lead to a reduction in bad debts and hence a lowering of admin expense, so why not option B??