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Calculate the NPV of a Change in Credit Terms Under

Question 162

Multiple Choice

Calculate the NPV of a change in credit terms under the following conditions: Sales will increase by $30,000, total incremental expenses will increase by 27,000, external financing needs are $32,000, and the cost of capital is 7.5%. Ignore taxes.


A) $3,000
B) $2,400
C) $40,000
D) $8,000

Correct Answer:

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