Question
Koban Corp. currently has an all-cash credit policy. It is considering making a change in the credit policy by going to terms of net 90
Koban Corp. currently has an all-cash credit policy. It is considering making a change in the credit policy by going to terms of net 90 days (Assume there are 30 days in each month). The required return will be calculated based on the effective annual rate of 8% (annually compounded). Calculate the Cost of Switching for this credit policy change (Do not use the $ sign. If your answer is +$123,456.78, enter 123456.78. If your answer is -$123,456.78, then enter -123456.78). Current policy New policy Price per unit $51 $56 Cost per unit $38 $42 Unit sales per 90 day-period 50,000 55,000
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