*Credit and Inventory Management The company is considering changing payments to credit (net 30)....
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*Credit and Inventory Management The company is considering changing payments to credit (net 30). The NPV of this credit policy is estimated at $12,000 with a monthly rate of return of 2.5%. The company is currently selling 6000 units per month at a selling price of $60 per unit and a variable cost per unit of $27. The fixed costs for orders are $40 and carrying costs per unit are $3. a) How many additional new units can the company sell if this credit policy is implemented? b) Calculate the company's optimal inventory after the credit policy is implemented.
The company is considering changing payments to credit (net 30). The NPV of this credit policy is estimated at $12,000 with a monthly rate of return of 2.5%. The company is currently selling 6000 units per month at a selling price of $60 per unit and a variable cost per unit of $27. The fixed costs for orders are $40 and carrying costs per unit are $3.
a) How many additional new units can the company sell if this credit policy is implemented?
b) Calculate the company's optimal inventory after the credit policy is implemented.
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