A company is considering switching from a cash only policy to a net 30 credit policy. The price per unit is $400 and the variable cost per unit is $250. The company currently sells 1,400 units per month. Under the proposed policy the company expects to sell 1,600 units per month. The required monthly return is 2%. If you were using NPV analysis to decide whether the company should switch to the net 30 credit policy, what amount would you use for the cost of switching? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit any commas and the $ sign in your response. For example, an answer of $1,000.50 should be entered as 1000.50.) Numeric Response
A company is considering switching from a cash only policy to a net 30 credit policy. The price per unit is $400 and the variable cost per unit is $250. The company currently sells 1,400 units per month. Under the proposed policy the company expects to sell 1,600 units per month. The required monthly return is 2%. If you were using NPV analysis to decide whether the company should switch to the net 30 credit policy, what amount would you use for the cost of switching? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit any commas and the $ sign in your response. For example, an answer of $1,000.50 should be entered as 1000.50.) Numeric Response
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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25) can i get help please
Transcribed Image Text:A company is considering switching from a cash only policy to a net 30 credit policy. The price per unit is $400 and the variable cost per unit is $250. The company
currently sells 1,400 units per month. Under the proposed policy the company expects to sell 1,600 units per month. The required monthly return is 2%. If you were
using NPV analysis to decide whether the company should switch to the net 30 credit policy, what amount would you use for the cost of switching? (Do not round
intermediate calculations. Round the final answer to 2 decimal places. Omit any commas and the $ sign in your response. For example, an answer of $1,000.50
should be entered as 1000.50.)
Numeric Response
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