20) Can i get help with this question please First Inc. currently grants no credit, but it is considering offering new credit terms of net 30. As a result, the price of its product will increase from $30 to$35. Expected sales will increase by 600 units per year. The original sales are 7,000 units per year. Variable costs will remain at $18 per unit and baddebt losses will amount to $12,000 per year. The firm will finance additional investment in receivables by using a line of credit, which charges 5% interest.The firm's tax rate is 40%. Calculate the NPV of this switch (Do not use the $ sign. If your answer is -$12,000, enter -12000, and if your answer is+$12,000, then enter 12000).Numeric Response

Given that, Sales = 7,000 units + 600 units =7600 units Price = $35 Then, sales price =…

First Inc. currently grants no credit, but it is considering offering new credit terms of net 30. As a result, the price of its product will increase from $3 $35. Expected sales will increase by 600 units per year. The original sales are 7,000 units per year. Variable costs will remain at $18 per unit and ba

First Inc. currently grants no credit, but it is considering offering new credit terms of net 30. As a result, the price of its product will increase from $3 $35. Expected sales will increase by 600 units per year. The original sales are 7,000 units per year. Variable costs will remain at $18 per unit and ba

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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13_Economics