Question
A company that currently follows a cash only policy is considering changing to a net 30 credit policy. Currently, the company sells 8,000 units each
A company that currently follows a cash only policy is considering changing to a net 30 credit policy. Currently, the company sells 8,000 units each month at a price of $65 per unit. However, the company expects to sell 8,100 units each month if it changes to the proposed net 30 credit policy. The variable cost per unit is $40 and the company's required monthly return is 0.85%. If you were calculating the NPV for this decision to change from a cash only policy to a net 30 credit policy, what amount would you use in your NPV analysis for the cost of switching? round final answer to 2 decimals
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