Question
PT. Shiny is a company that produces jewelry and currently applies a cash-only sales policy. In this new year's holiday season, the company is considering
PT. Shiny is a company that produces jewelry and currently applies a cash-only sales policy. In this new year's holiday season, the company is considering changing its cash-only sales policy to a net 45-day credit. The new credit policy is expected to increase sales from 1200 units per month to 1350 units per month. The current selling price per unit and variable cost per unit are $175.000 and $100.000, respectively. However, if the product is sold on credit, the selling price per unit and the variable cost per unit will remain constant. The required return is 3% per month.
Based on the above information, calculate the NPV of the new credit policy! Should PT. Shiny change its sales policy?
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