Question: 3. Answer the following questions based on the information below Current credit policy(n/a) Proposed credit policy (net 30) Price (RO) 10 12 Variable cost per

3. Answer the following questions based on the information below Current

3. Answer the following questions based on the information below Current credit policy(n/a) Proposed credit policy (net 30) Price (RO) 10 12 Variable cost per unit (RO) 4 5 Quantity 100,000 150,000 Monthly rate 2% What is the incremental cash flows from switching credit policies? (2 pts) What is the cost of switching? (2 pts) (2 pts) c. What is your recommendation? d. Assume that the variable cost and the price per unit remain constant, what is the break-even sales increase? In (2 pts)

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