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What amount would you use for the cost of switching

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Question - A company is considering switching from a cash only policy to a net 30 credit policy. The price per unit is $800 and the variable cost per unit is $600. The company currently sells 1,000 units per month. Under the proposed policy the company expects to sell 1,200 units per month. The required monthly return is 1%. If you were using NPV analysis to decide whether the company should switch to the net 30 credit policy, what amount would you use for the cost of switching?

Reference no: EM133042627

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