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A. What is the incremental cash flows from switching credit policies? B. What is the cost of switching? C. What is your recommendation? D. What

A. What is the incremental cash flows from switching credit policies?

B. What is the cost of switching?

C. What is your recommendation?

D. What is the break-even sales increase? Interpret.

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Current credit policy(n/a) Proposed credit policy (net 30) Price (RO) 15 15 Variable cost per unit (RO) 10 11 Quantity 100,000 140,000 Monthly rate 1.20% Current credit policy(n/a) Proposed credit policy (net 30) Price (RO) 15 15 Variable cost per unit (RO) 10 11 Quantity 100,000 140,000 Monthly rate 1.20%

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