Question
Cape May Products currently sells 130 units a month at a price of $200 a unit. The firm believes it can increase its sales by
Cape May Products currently sells 130 units a month at a price of $200 a unit. The firm believes it can increase its sales by an additional 30 units if it switches to a net 30 credit policy. The monthly interest rate is .5 percent and the variable cost per unit is $140. What is the incremental cash inflow from the proposed credit policy switch? SHOW ALL WORK
Answer choices below
$5,400 $3,933 $1,800 $8,600
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Financial Institutions Management
Authors: Anthony Saunders, Marcia Cornett
8th Edition
0078034809, 978-0078034800
