Sanchez, Inc., is considering a change in its cash-only sales policy. The new terms of sale would
Question:
Sanchez, 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 buildup of receivables in this case. The required return is .95 percent per month.
Transcribed Image Text:
Current Policy New Policy $ 540 Price per unit Cost per unit Unit sales per month $ 540 $ 395 1,080 $ 395 1,130
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The cost of switching is the lost sales from the existing policy plus the incr...View the full answer
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Related Book For
Fundamentals of Corporate Finance
ISBN: 978-1260153590
12th edition
Authors: Stephen M. Ross, Randolph W Westerfield, Robert R. Dockson, Bradford D Jordan
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