Red Hawk, 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 the company should proceed or not. Describe the buildup of receivables in this case. The required return is .95 percent per month.

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Current Policy New Policy $ 485 $ 365 $ 485 $ 365 Price per unit Cost per unit Unit sales per month 920 975