Problem - Credit Policy Evaluation

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Problem - Credit Policy Evaluation

Royal, Inc., is considering a change in its cash-only sales policy. The new terms of sale would be net one month. Based on the following information, determine if the company should proceed or not. Describe the build-up of receivables in this case. The required return is .95 percent per month.

 

Current Policy

New Policy

Price per unit

$680

$680

Cost per unit

$455

$455

Unit sales per month

1,070

1,120

Reference no: EM132838276

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