Calculate the npv of decision to grant credit

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Reference no: EM132045547

Solar Engines manufactures solar engines for tractor-trailers. Given the fuel savings available, new orders for 190 units have been made by customers requesting credit. The variable cost is $11,800 per unit, and the credit price is $14,500 each. Credit is extended for one period. The required return is 2 percent per period. If Solar Engines extends credit, it expects that 25 percent of the customers will be repeat customers and place the same order every period forever, and the remaining customers will place one-time orders.

Calculate the NPV of the decision to grant credit. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

NPV $

Reference no: EM132045547

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