Your Firm Currently Has a Cash Sales Only Policy

Your firm currently has a cash sales only policy. Under this policy, you sell 340 units a month at a price of $125 a unit. Your variable cost per unit is $82 and your carrying cost per unit is $2.20. The monthly interest rate is 1.25 percent. You think that you can increase your sales to 400 units a month if you institute a net 30 credit policy. What is the net present value of the switch using the one-shot approach?

A) $154,260
B) $158,980
C) $161,230
D) $161,870
E) $162,020