Your Current Sales Consist of 40 Units Per Month at a Price

Your current sales consist of 40 units per month at a price of $125 a unit. You are weighing the pros and cons of switching to a net 30 credit policy from your current cash only policy. If you decide to
Switch your credit policy you also plan to increase the sales price to $139 a unit. The monthly
Interest rate is 1.5 percent. What is the break-even default rate of the proposed switch?

A) 8.25 percent
B) 8.42 percent
C) 8.67 percent
D) 8.72 percent
E) 9.06 percent