29 NPV of Credit Policy Switch Suppose a corporation currently sells Q units per month for a cashonly price of P. Under a new credit policy that allows one month’s credit, the quantity sold will be Q’ and the price per unit will be P". Defaults will be π per cent of credit sales. The variable cost is ν per unit and is not expected to change. The percentage of customers who will take the credit is α, and the required return is R per month. What is the NPV of the decision to switch? Interpret the various parts of your answer.