You are currently selling 80 units a month at a price of $220 a unit. Your variable cost of each unit is $160. If you switch from your current cash sales only policy to a net 30 policy you think your sales will increase to a total of 110 units per month. Your monthly interest rate is 1 percent. What is the net present value of this proposed switch using the accounts receivable approach?
A) $151,500
B) $153,900
C) $154,200
D) $157,600
E) $158,300

Question

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The Answer of You are currently selling 80 units a month at a price of $220 a unit. Your variable cost of each unit is $160. If you switch from your current cash sales only policy to a net 30 policy you think your sales will increase to a total of 110 units per month. Your monthly interest rate is 1 percent. What is the net present value of this proposed switch using the accounts receivable approach?
A) $151,500
B) $153,900
C) $154,200
D) $157,600
E) $158,300

You Are Currently Selling 80 Units a Month at a Price