You Are Currently Selling 72 Units a Month at a Price

question 39

Multiple Choice

You are currently selling 72 units a month at a price of $210 a unit.Your variable cost of each unit is $130.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 95 units per month.The monthly interest rate is 1.5 percent.What is the net present value of this proposed switch using the accounts receivable approach?

• A)$104,557
• B)$114,829
• C)$134,822
• D)$136,516
• E)$141,520

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Definitions:

Renewable Energy Resources

Natural sources of energy that can be replenished, including solar, wind, hydroelectric, biomass, and geothermal energy.

Oil Imports

The purchase of petroleum products or crude oil from foreign countries to meet a nation's energy needs and fuel its economy.

Pollution

The introduction of contaminants into the natural environment that cause adverse change, potentially harming human health and the ecosystem.

Economic Security

The condition of having stable income or resources to support a standard of living now and in the foreseeable future, encompassing employment, health care, and social safety nets.