In her role as collections manager, Noreen has to write a letter informing customers with overdue…

In her role as collections manager, Noreen has to write a
letter informing customers with overdue accounts that the interest rate has
risen by 1 percent, effective 30 days from the date on the letter. This policy
means Petro-Gos current interest rate is 14 percent and in 30 days will
increase to 15 percent. Overdue accounts are charged with compounding interest
(that is, interest on both the previous months balance and the interest
already charged on that months balance).

Is the direct or indirect approach best for this bad-news
message? Why?

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