Intro

Newton's Networking sells $1,000$ units for $$61$ each every month, with variable costs of $$50.$ The company is planning to switch its credit policy from cash only to net $30$ and expects monthly sales to increase to $1,100$ units. The monthly interest rate is $1\%.$

Part $1$

Attempt $\frac{1}{3}$ for $10$ pts$.$

What is the present value of the incremental cash flows due to the new policy?

$$

$$

Part $2$

Attempt $\frac{1}{3}$ for $10$ pts$.$

What is the present value of the cost of switching to the new policy, assuming that all customers will use the full credit?

$$

$$

Part $3$

Attempt $\frac{1}{3}$ for $10$ pts$.$

What is the NPV of switching to the new policy?

$$

$$

Part $4$

Attempt $\frac{1}{3}$ for $10$ pts$.$

What is the break$-$even quantity?

$$