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73. Cape May Products currently sells 650 units a month at a price of $59 a unit. The firm believes it can increase its sales
73. Cape May Products currently sells 650 units a month at a price of $59 a unit. The firm believes it can increase its sales by an additional 125 units if it switches to a net 30 credit policy. The monthly interest rate is 0.35 percent and the variable cost per unit is $38. What is the monthly incremental cash inflow from the proposed credit policy switch? a $774 b. $2,625 c. $4,750 d. $5,690 74. Preston Milled Products currently sells a product with a variable cost per unit of $21 and a unit selling price of $40. At the present time, the firm only sells on a cash basis with monthly sales of 2.800 units. The monthly interest rate is 0.5 percent. What is the switch break-even point if the firm switched to a net 30 credit policy? Assume the selling price per unit and the variable costs per unit remain constant. a. 2,830 units b. 2,910 units c. 3,333 units d. 3,414 units 75. You are trying to attract new customers that you feel could become repeat customers. The average selling price of your products is $69 each with a $41 per unit variable cost. The monthly interest rate is 1.2 percent. Your experience tells you that 8 percent of these customers will never pay their bill. What is the value of a new customer who does not default on his or her bill? a $1,986 b. $2,333 C. $2,147 d $4,817
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