Solved: What is the npv of one years sales under the cu0rrent policy, Finance Basics

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What is the npv of one years sales under the cu0rrent policy

Problem: A firm currently uses credit terms of net 35 with no discounts allowed. It has sales of $2M (M = million), cost of sales (at t = 0) of $1.3M. On average, 98% of customers pay in 2 months, while 2% of customers never pay. At a required return of 1% per month, what is the NPV of one year's sales under the current policy?

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