**Text for Educational Website:**---### Analyzing a Change in Sales Policy at Red Hawk, IncorporatedRed Hawk, Incorporated, is evaluating a potential modification to its current cash-only sales policy. The new policy would involve offering net terms of one month for sales. The required rate of return for this decision is 0.9 percent per month.#### Current vs. New Policy Overview:| | Current Policy | New Policy ||----------------|---------------|-------------|| **Price per unit** | $1,040 | $1,040 || **Cost per unit** | $850 | $850 || **Unit sales per month** | 1,100 | 1,200 |#### Task:Calculate the Net Present Value (NPV) of the decision to switch policies. It is important to note that intermediate calculations should not be rounded, and the final answer should be rounded to two decimal places (e.g., 32.16).**NPV Calculation Box:**| NPV | [ ] |--- This content provides the necessary details for understanding the financial implications of changing sales terms and facilitates an NPV analysis for effective decision-making.

NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…

Answered: Red Hawk, Incorporated, is considering…

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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