Lemius Industries Is Considering a Net 30-Day Credit Policy, Which

question 296

Multiple Choice

Lemius Industries is considering a net 30-day credit policy, which it believes will increase sales by 25%. Currently Lemius sells 800 units a month at a retail price of $45 a unit and a variable cost of
$32 each. Lemius has a required monthly rate of return of 1.75%. What is the net present value of
This possible switch in credit policies?

• A) $99,839
• B) $103,897
• C) $106,171
• D) $118,971
• E) $120,008

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Definitions:

Provisions

Supplies of food, drink, equipment, and other necessities, especially for a journey, military campaign, or period of scarcity.

American Policy

Refers to the set of laws, regulations, and guidelines adopted by the government of the United States to govern domestic and foreign affairs.

Philippines

A Southeast Asian country in the Western Pacific, comprising more than 7,000 islands, known for its waterfront promenade, colonial architecture, and diverse culture and history.

1898

Marked significant events such as the Spanish-American War, leading to the U.S. acquiring territories like Puerto Rico, Guam, and the Philippines.