Currently, Tyler Enterprises Sells 350 Units a Month at a Price

question 101

Multiple Choice

Currently, Tyler Enterprises sells 350 units a month at a price of $42 a unit. The company thinks they can increase sales by an additional 100 units if they switch to a net 30 credit policy. The
Monthly interest rate is .4 percent and the variable cost per unit is $22. What is the incremental
Cash inflow of the proposed credit policy switch?

• A) $1,480
• B) $2,000
• C) $2,200
• D) $2,520
• E) $4,200

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Definitions:

Selling Price

The amount at which something is sold, determining how much a buyer pays and a seller receives.

Markup on Cost

A pricing method where a preset percentage is added to the cost of a product to determine its selling price, often to cover overhead and profit margins.

The Cloud

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Internet

A global network of computers.