Question
Royal, Inc., is considering a change in its cash-only sales policy. The new terms of sale would be net one month. The required return is
| Royal, Inc., is considering a change in its cash-only sales policy. The new terms of sale would be net one month. The required return is .92 percent per month. |
| Current Policy | New Policy | |||||
| Price per unit | $ | 1060 | $ | 1060 | ||
| Cost per unit | $ | 870 | $ | 870 | ||
| Unit sales per month | 1120 | 1220 | ||||
| Calculate the NPV of the decision to switch |
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Governmental and Nonprofit Accounting
Authors: Robert Freeman, Craig Shoulders, Gregory Allison, Robert Smi
10th edition
132751267, 978-0132751261
