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Your company is evaluating a switch from a cash - only policy to a net 3 0 policy. This means instead of requiring all customers
Your company is evaluating a switch from a cashonly policy to a net policy. This means instead of requiring all customers to pay cash at the time of sale, all customers are now extended credit at zero interest by the store and must pay their bill within days. The expected benefit from this new policy is a increase in monthly sales.
Specifically, let the price per unit be denoted as P and the variable cost per unit as V The company currently sells units per month. Under the proposed policy the company will sell units per month. The required monthly return is What range of P as a function of V would make the company adopt the proposed policy?
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