Credit Policy Evaluation Quest, Inc., is considering a change in its cash-only sales policy. The new terms
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Credit Policy Evaluation Quest, Inc., is considering a change in its cash-only sales policy. The new terms of sale would be net one month. Based on the following information, determine if Quest should proceed or not. Describe the buildup of receivables in this case. The required return is 1.5 percent per month.
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Current Policy New Policy Price per unit S 780 S 780 S 475 Cost per unit $ 475 1,420 Unit sales per month 1,505
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The cost of switching is the lost sales from the existing policy plus the incr...View the full answer
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Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th Edition
Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan
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