HPH, Inc. just made a credit sale of $100,000. Collection on this credit sale will be delayed by the length of the operating cycle. The CGS associated with this credit sale equal $50,000, and are delayed by days payable outstanding. Use the following information to calculate the increase in firm value that would occur by achieving the industry median cash flow timing given below: Current cash flow timing: DIH = 40 days, DSO = 60 days and DPO = 30 days Industry median cash flow timing: DIH = 15 days, DSO = 30 days and DPO = 30 days Discount rate = 3.65%

Select one:

a.

-$542.12

b.

$542.12

c.

$49,159.90

d.

$49,702.02