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Stamford, Inc. currently sells 6,450 units a month. The company is considering replacing its current cash only credit policy with a net 30 policy. The
- Stamford, Inc. currently sells 6,450 units a month. The company is considering replacing its current cash only credit policy with a net 30 policy. The price per unit is $45.83 and the variable cost per unit is $26.23. Under the proposed policy, the company will sell 6,800 units per month. The monthly interest rate is 2%. What is the NPV of the switch? Should the company offer credit terms of net 30?
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