How much more is company worth switching to the new terms

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Reference no: EM131298167

LETU Inc. is considering modifying its credit terms from net 30 to net 45. They believed that although DIH (50 days) and DPO (60 days) will not change, it will result in a 7% increase in sales. LETU’s annual sales is $600 million and COGS equal 60% of sales. LETU’s annual cost of capital is 10%. How much more is the company worth switching to the new terms?

Reference no: EM131298167

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How much more is company worth switching to the new terms : LETU Inc. is considering modifying its credit terms from net 30 to net 45. They believed that although DIH (50 days) and DPO (60 days) will not change, it will result in a 7% increase in sales. LETU’s annual sales is $600 million and COGS equal 60% o..

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