Question: Locust is evaluating a switch from a cash only policy to a net 3 0 policy. The price per unit is $ 4 9 ,

Locust is evaluating a switch from a cash only policy to a net 30 policy. The price per unit is $49, and the variable cost per unit is $20. The required monthly return is 2%. The company currently sells 100 units per month. Under the proposed policy, the company expects to sell 110 units per month. What is the NPV of granting a new customer in case of a permanent sale, if the probability of customer default is 20%?

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