Currently, the Toy Box Sells 465 Units a Month at an Average

question 4

Multiple Choice

Currently, The Toy Box sells 465 units a month at an average price of $39 a unit. The company thinks it can increase sales by an additional 130 units a month if it switches to a net 30 credit policy. The monthly interest rate is 0.4 percent and the variable cost per unit is $21. What is the incremental cash inflow of the proposed credit policy switch?

• A)$2,120
• B)$2,340
• C)$2,200
• D)$2,730
• E)$5,070

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Definitions:

Levels

The different values or categories of a factor in an experiment.

Combinations

A mathematical technique to determine the total possible arrangements of a set of items where the order of the items does not matter.

Factorial Designs

A statistical analysis method that allows researchers to study the effects of two or more independent variables on a dependent variable simultaneously.

Single-Factor Designs

Experiments that investigate the effect of one independent variable on one or more dependent variables.