Part B only

14 Until recently, Augean Cleaning Products sold its products on terms of net 68, with an average collection period of 83 days. In an attempt to induce customers to pay more promptly, it has changed its terms to 3/10, EOM, net 68. Assume current sales of $100, costs of $88, an interest rate of 11%, and no defaults. Assume each month has 30 days and a year has 360 days. The initial effect of the changed terms is as follows: 1.56 points Percent of Sales with Cash Discount 68 Average Collection Periods (Days) Cash Discount Net 38a 88 Some customers deduct the cash discount even though they pay after the specified date. a. Calculate the NPV per $100 of sales based on the original terms. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is complete and correct. Net present value $ 9.65 b. Assume that sales volume is unchanged and there are no defaults. Calculate the NPV per $100 of sales based on the revised terms. (Assume all sales occur in the middle of the month. Do not round intermediate calculations. Round your answer to 2 decimal places.) X Answer is complete but not entirely correct. Net present value $ 8.76 X