Your fiRm Currently Sells 130 Units a Month at a Price

question 163

Multiple Choice

Your firm currently sells 130 units a month at a price of $210 a unit. You think you can increase your sales by an additional 50 units if you switch to a net 30 credit policy. The monthly interest rate is .6
Percent and your variable cost per unit is $125. What is the net present value of the proposed credit
Policy switch?

• A) $651,989
• B) $652,008
• C) $666,667
• D) $674,783
• E) $675,020

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Definitions:

Brain Wave Activity

Electrical impulses in the brain that are measured by EEG and indicate the brain's functional states.

Non-Problem Drinkers

Individuals who consume alcohol but do not experience adverse consequences or dependency.

Classical Conditioning

A type of learning described by the Russian physiologist Ivan Pavlov (1849–1936). In classical conditioning, a response is transferred from one stimulus to another. John B. Watson, an early behaviorist, took the view that classical conditioning was the basis for human behavior, including abnormal behavior. See also operant conditioning.

Animal Models

Non-human species used in research to understand biological and psychological processes and to test hypotheses about diseases or behaviors.