Quest, Inc

question 22

Multiple Choice

Quest, Inc., is considering a change in its cash-only sales policy.The new terms of sale would be one month.The required return is 1.6 percent per month.Based on the following information, what is the NPV of the new policy?

• A)$28,750
• B)$32,500
• C)$35,000
• D)$38,250
• E)$40,000

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Definitions:

Shares Outstanding

The total number of shares of a corporation that have been authorized, issued, and purchased by investors and are held by them.

Debt-Equity Ratio

A metric indicating the balance between shareholders' equity and debt in financing a company's assets.

Capital Spending

Expenditures by a business for acquiring or upgrading physical assets such as property, industrial buildings, or equipment.

Earnings Estimate

A projection or forecast of a company's future earnings per share, often provided by analysts.