You Are Currently Selling 48 Units a Month at a Price

question 61

Multiple Choice

You are currently selling 48 units a month at a price of $199 a unit. Your variable cost of each unit is $87. If you switch from your current cash sales only policy to a net 30 policy you think your sales will increase to a total of 55 units per month. The monthly interest rate is 1.2 percent. What is the present value of this switch using the accounts receivable approach?

• A) $55,172
• B) $64,829
• C) $80,822
• D) $76,516
• E) $41,520

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Definitions:

Strike Situation

A work stoppage by employees as a protest, typically to gain improved employment conditions or pay.

Bargaining Unit

A group of employees with a clear and identifiable community of interests who are represented by a single union in collective bargaining.

Provincial Labour Relations Board

A governmental body responsible for regulating labor and employment relations within a specific province, often focusing on issues related to unions and collective bargaining.

Plant Nurse

A healthcare professional who works within an industrial or corporate setting, providing medical care and health surveillance to employees.