*Credit and Inventory Management The company is considering changing payments to credit (net 30)....
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Finance
*Credit and Inventory Management
The company is considering changing payments to credit (net 30). The NPV of this credit policy is estimated at $12,000 with a monthly rate of return of 2.5%. The company is currently selling 6000 units per month at a selling price of $60 per unit and a variable cost per unit of $27. The fixed costs for orders are $40 and carrying costs per unit are $3.
a) How many additional new units can the company sell if this credit policy is implemented?
b) Calculate the company's optimal inventory after the credit policy is implemented.
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