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Crane Inc. switches to 3/10 net 30 from net 30 . It is estimated that 75 percent of customers will take advantage of the discount,

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Crane Inc. switches to 3/10 net 30 from net 30 . It is estimated that 75 percent of customers will take advantage of the discount, while the remaining 25 percent will pay on day 30 . The price will increase from $55 to $56 per unit; unit sales will remain at 11,000 per year: and variable costs will remain at $28 per unit. Bad debt losses will not be affected. Assume a 40-percent tax rate and a 5 -percent discount rate. Calculate the NPV. (Round new average collection period to 0 decimal places, eg. 15 and fianl answer to 2 decimal places, es. 15.75. Enter negative amounts using either a negative sign preceding the number eg. -45 or parentheses e. . (45).) Should the firm switch to the new policy? Crane Inc. switches to 3/10 net 30 from net 30 . It is estimated that 75 percent of customers will take advantage of the discount, while the remaining 25 percent will pay on day 30 . The price will increase from $55 to $56 per unit; unit sales will remain at 11,000 per year: and variable costs will remain at $28 per unit. Bad debt losses will not be affected. Assume a 40-percent tax rate and a 5 -percent discount rate. Calculate the NPV. (Round new average collection period to 0 decimal places, eg. 15 and fianl answer to 2 decimal places, es. 15.75. Enter negative amounts using either a negative sign preceding the number eg. -45 or parentheses e. . (45).) Should the firm switch to the new policy

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