Problem
Your company is considering whether to extend 30 day terms on a credit sales to major customers on sales of 51,000+ It typically costs you $0.70 for each dollar of sales. It will cost $0.02/dollar to check the customer's credit and about $0.02/dollar in administrative collection costs. Your company's annual WACC is 13%, and you expect the customers to pay in 30 days. What is the NPV of extending this credit sale?