Your Current Sales Consist of 32 Units Per Month at a Price

question 70

Multiple Choice

Your current sales consist of 32 units per month at a price of $225 a unit.You are weighing the pros and cons of switching to a net 30 credit policy from your current cash only policy.If you decide to switch your credit policy you also plan to increase the sales price to $240 a unit.If you make the switch you do not expect your total monthly sales quantity to change but you do expect a 3 percent default rate.The monthly interest rate is 1.5 percent.What is the net present value of the proposed credit policy switch?

• A)$6,727
• B)$6,893
• C)$7,965
• D)$9,440
• E)$9,481

---

Definitions:

Government Initiated

Actions or policies that are started or introduced by government agencies or authorities to address specific issues or promote public welfare.

Social Responsibility

The obligation of organizations and individuals to act for the benefit of society at large.

Public Diplomacy

A process wherein governments communicate and build relationships with foreign publics to achieve their political and diplomatic objectives.

September 11

Refers to the terrorist attacks on September 11, 2001, in the United States, resulting in significant changes in the country's policies and global outlook on terrorism.