What is the npv of switching

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Reference no: EM132477987

You are the owner of Amazing Gear, a winter sports manufacturer. You are evaluating a switch from a cash only credit policy to a net 30 day policy and have gathered the following information:

The sales price per unit is $200, and the variable cost per unit is $80.

The company currently sells 1200 units per month.

Under the proposed policy, the company expects it will increase sales to 1250 units per month. The required monthly return is 1.5%

What is the NPV of switching and will switching increase shareholder wealth?

Reference no: EM132477987

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