A seller is considering extending trade credit to an existing customer that buys on cash terms. The customer has just placed a sales order (cash terms) for immediate delivery of 400 units at a sales price per unit of $100. The customer states that they will increase their sales order by 10 units if they receive a 90-day credit period. Variable costs are $65 per unit and involve an immediate cash outflow. If the seller has an annual opportunity cost rate of 7.3%, what is the present value of the cash flows from extending credit to the customer?

Select one:

a. -$26,650.00

b. $13,625.05

c. $14,000.00

d. $40,275.05