Problem:
Cape May Products currently sells 80 units a month at a price of $238 a unit. The firm believes it can increase its sales by an additional 38 units if it switches to a net 30 credit policy. The monthly interest rate is .2 percent and the variable cost per unit is $168.
Required:
Question: What is the incremental cash inflow from the proposed credit policy switch?
Note: Please provide full description.
$3,192
$4,480
$2,660
$5,600
$8,260