2. Firm X has just received a purchase order for 2,800 units at a price of $340 per unit. This order is made on cash terms (i.e., no trade credit extended). Management at Firm X is considering offering trade credit terms of net 30 days, in an effort to increase sales. The table below shows projected financial information for the proposed trade credit terms and current cash terms. Based on this information, calculate the NPV associated with the change. Assume that the first transaction would occur today, followed by monthly sales in perpetuity. The required annual return is 10%. (10 points) New Policy Current Policy Price per Unit $350 $350 Cost per Unit $270 $260 Unit Sales per Month 3,000 2,800 PV = (1 + (365 ) AR Turnover Revenues 365 DSO - AR Turnover Inventory Turnover COGS Inventory 365 Inventory Turnover AP Turnover 365 DPO = AP Turnover -- VCR(S) NPV = __ S - EXP(S) [1 +265)(CP)] NPV perpaDailyNPV 365 E0Q = 2( DOC) TGNV = (00) []+cH0 (9) HC Avg Inventory = 10 = (1+2) (603452) PV= Invoice Price(1-d) [1+ (365)