Lealos, Inc., is considering a change in its cash-only sales policy. The new terms of sale would

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Lealos, 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 Lealos should proceed or not. Describe the buildup of receivables in this case.

The required return is .95 percent per month.

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Corporate Finance

ISBN: 978-0077861759

10th edition

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe

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Question Posted: Aug 28, 2014 10:33 AM

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Lealos, Inc., is considering a change in its cash-only sales policy. The new terms of sale would

Question:

Price per unit Cost per unit Unit sales per month Current Policy $720 $495 1,100 New Policy $720 $495 1,140

Step by Step Answer:

The cost of switching is any lost sales from the existing policy plus the incre...View the full answer

Corporate Finance

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