Hildegarde Inc. is considering a change in its cash-only sales policy. The new terms of sale would

Question:

Hildegarde 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 Hildegarde should proceed or not. Describe the buildup of receivables in this case. The required return is 0.95 percent per month.

Current Policy New Policy Price per unit Cost per unit Unit sales per month $720 $525 1,240 $720 $525 1,290