Credit Policy Cold Fusion plc (manufacturer of the Mr Fusion home power plant) is considering a new

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Credit Policy Cold Fusion plc (manufacturer of the Mr Fusion home power plant) is considering a new credit policy. The current policy is cash only. The new policy would involve extending credit for one period. Based on the following information, determine if a switch is advisable. The interest rate is 2.0 per cent per period:

Current policy New policy Price per unit (£) 175 175 Cost per unit (£) 130 130 Sales per period

(units)

1,000 1,100

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Related Book For  book-img-for-question

Fundamentals Of Corporate Finance

ISBN: 9780077178239

3rd Edition

Authors: David Hillier, Iain Clacher, Stephen A. Ross

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