Currently, BMW Corporation sells 350,000 units of widgets a month at a price of $21 a unit. The company currently has a net 30 credit policy. Mr. Jay, the companys financial manager, is evaluating a new credit policy of net 60 for the company. The marketing manager thinks that sales would increase by 10,000 units per month if the company were to switch to the new credit policy. The APR for OET is 13% compounded monthly, and its variable cost per widget is $12. Ignore taxes. Tomorrow, Mr. Jay will be making a presentation on the new proposed credit policy to the CEO of BMW. He will be expected to provide answers to the following questions.

The net present value of the proposed credit policy switch is

1. $437,295.90
2. $592,032.32
3. $639,284.55
4. $783,926.13
5. $837,692.31