Red Hawk, Incorporated, is considering a change in its cash-only sales policy. The new terms of sale would be net one month. The required return is .6 percent per month. Price per unit Cost per unit Unit sales per month Current Policy New Policy $ 740 $740 $ 540 $540 800 850 Calculate the NPV of the decision to switch. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV
Red Hawk, Incorporated, is considering a change in its cash-only sales policy. The new terms of sale would be net one month. The required return is .6 percent per month. Price per unit Cost per unit Unit sales per month Current Policy New Policy $ 740 $740 $ 540 $540 800 850 Calculate the NPV of the decision to switch. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Red Hawk, Incorporated, is considering a change in its cash-only sales policy. The new
terms of sale would be net one month. The required return is .6 percent per month.
Price per unit
Cost per unit
Unit sales per month
Current
Policy
New
Policy
$ 740
$ 740
$ 540
$540
800
850
Calculate the NPV of the decision to switch. (Do not round intermediate calculations
and round your answer to 2 decimal places, e.g., 32.16.)
NPV
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