Currently, Your Firm Sells 170 Units a Month at a Price

question 135

Multiple Choice

Currently, your firm sells 170 units a month at a price of $140 a unit. You think you can increase your sales by an additional 30 units if you switch to a net 30 credit policy. The monthly interest rate is.6 percent and your variable cost per unit is $100. What is the net present value of the proposed credit policy switch?

• A) $173,200
• B) $187,200
• C) $190,200
• D) $197,000
• E) $200,000

Identify what constitutes cash and cash equivalents.

Recognize the direct and indirect methods of reporting cash flows from operating activities.

Comprehend the process of converting accrual basis income to cash basis.

Know the major sources of cash inflows and outflows reported in the statement of cash flows.

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Definitions:

Indians

Refers to the indigenous peoples of the Americas, often used in a historical context to describe the native populations encountered by European explorers and colonizers.

Europeans

People from the continent of Europe or of European descent.

Furs

Textiles made from the pelts of animals, historically significant in trade and fashion, but have become controversial due to ethical concerns regarding animal rights.

Exploratory Voyages

Journeys undertaken by explorers to discover unknown lands, map new territories, and establish contacts.