Home Accents currently sells 219 units a month at a price of $46 a unit. If it switches to a net 30 credit policy, monthly sales are expected to increase by 28 units. The monthly interest rate is .57 percent and the variable cost per unit is $21. What is the net present value of the proposed credit policy switch?

Respuesta :

Answer:

Net Present Value per month =  $696.03

Explanation:

The net present value is the difference between the present value of cash inflows and the present value of net cash flow

Operating cash flow = (46-21)× 28= 700

Net present value per month = 700×  1.0057 ^(-1)

                                                 =$696.03