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Homework answers / question archive / H Corp is considering a change in its cash-only policy for perpetual orders
H Corp is considering a change in its cash-only policy for perpetual orders. The new terms would be net 30 days. Based on the following Table, what do you recommend, should the firm go ahead with the credit policy over cash-only policy? Required return 1% per month. Cash Policy Credit Policy Price/unit 300 INR 310 INR Cost/unit 25DINR 270 INR 1200 1250 Unit sales per month Calculate the NPV of the switch from cash policy to credit policy for perpetual order? Should the company go ahead with credit policy over cash policy?
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