Microbiotics currently sells all of its frozen dinners cash on delivery but believes it can increase sales by offering supermarkets 1 month of free credit. The price per carton is $50, and the cost per carton is $40

a. If unit sales will increase from 1,000 cartons to 1,060 per month, should the firm offer the credit? The interest rate is 1% per month, and all customers will pay their bills.

b. What if the interest rate is 1.5% per month?

c. What if the interest rate is 1.5% per month but the firm can offer the credit only as a special deal to new customers, while old customers will continue to pay cash on delivery?

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Price per carton Cost per carton Current sales Expected sales Interest rate per month-1 Interest rate per month-2 S50.00 S 40.00 1,000.00 cartons 1,060.00 cartons 1.00% 1.50%