A company that is considering switching from a cash only policy to a net 30...
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A company that is considering switching from a cash only policy to a net 30 policy currently sells 10,200 units per month at a price of $240 per unit. The variable cost per unit is $160. The company is expected to sell 10,500 units per month under the proposed net 30 policy. The required monthly return is 1.2%. Assume you were computing the NPV for the decision to change from the current cash only policy to the proposed net 30 policy. What amount would you use in your NPV analysis for the cost of switching?
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