Question

In: Finance

Lewis Companies sells 2,600 units a month for cash at a price of $299 a unit...

Lewis Companies sells 2,600 units a month for cash at a price of $299 a unit and a variable cost of $187 a unit. The firm estimates it can increase its sales by 200 units a month if it switches to a net 30 credit policy while keeping its price and costs at their current levels. If the monthly cost of capital is .85 percent, what is the NPV of switching?

A.

$1,590,005

B.

$1,394,008

C.

$1,211,036

D.

$1,820,494

E.

$2,006,413

Solutions

Expert Solution

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ANSWER : D : $1820494

jeff jeffy answered 3 months ago
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