A Firm Currently Sells Its Product with a 2% Discount

question 4

Multiple Choice

A firm currently sells its product with a 2% discount to customers who pay by cash or credit card when they purchase one of the firm's products; otherwise, the full price is due within 30 days. Forty percent of customers take advantage of the discount. The firm plans to drop the discount so the new terms will simply be net 30. In doing so it expects to sell 100 fewer units per month and all customers to pay at day 30. The firm currently sells 1 000 units per month at a cost per unit of $45 and a selling price per unit of $80. If the firm's required return is 2%, what is the net present value (NPV) of making this change?

• A)-$169 860
• B)$64 490
• C)-$122 420
• D)$172 320

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Definitions:

Mesonephric Duct System

Embryonic structures that develop into the male reproductive system and contribute to the female reproductive tract.

Testosterone

Steroid hormone secreted primarily by the testes; aids in spermatogenesis, maintenance and development of male reproductive organs, secondary sexual characteristics, and sexual behavior.

Mullerian-Inhibiting Hormone

A hormone responsible for the regression of Mullerian ducts in the male embryo, crucial for male sex differentiation.

Reproductive Structures

Reproductive structures are specialized organs and tissues in organisms that are involved in reproduction, including testes in males and ovaries in females among others.