Your Current Sales Consist of 25 Units Per Month at a Price

question 335

Multiple Choice

Your current sales consist of 25 units per month at a price of $200 a unit. You are weighing the pros and cons of switching to a net 30 credit policy from your current cash only policy. If you decide to
Switch your credit policy you also plan to increase the sales price to $215 a unit. The monthly
Interest rate is 2 percent. What is the break-even default rate of the proposed switch?

• A) 4.48 percent
• B) 4.59 percent
• C) 4.65 percent
• D) 4.97 percent
• E) 5.12 percent

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Definitions:

Sustainable Procurement

The acquisition process whereby organizations meet their needs for goods, services, works, and utilities in a way that achieves value for money on a whole-life basis in terms of generating benefits not only to the organization but also to society and the economy, while minimizing damage to the environment.

Long-Term Impact

The lasting effects or consequences of an action or event over an extended period.

Green Purchasing

The procurement of products and services that are environmentally friendly, including considerations for energy efficiency, recyclability, and reduced pollution.

Inconsistent Service

Variation in the quality or delivery of services provided to customers, leading to unpredictable customer experiences.