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 $100$ units at a sales

price per unit of $$50.$ The customer states that they will increase their sales order by $5$ percent if

they receive a $30-$day credit period. Variable costs are $$45$ per unit and involve an immediate cash

outflow. If the seller has an annual opportunity cost rate of $7\mathrm{.}3$ percent, what is the NPV of extending

credit to the customer?

Using the information from problem $3,$ calculate the break$-$even quantity sold that would make the

seller indifferent between extending credit or continuing to sell on cash terms.