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Your company is evaluating a switch from a cash only policy to a net 30 policy. The price per unit product is $49, and the

  1. Your company is evaluating a switch from a cash only policy to a net 30 policy. The price per unit product is $49, and the variable cost per unit is $20. The company currently sells 100 units per month. Under the proposed policy, the company expects to sell 110 units per month. The companys cost of capital for this line of business is 2% monthly. Assume that the possibility of nonpayment is small enough to ignore. What is the NPV of switching to a net 30 policy? Should the company switch?

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