Your Firm Currently Sells 320 Units a Month at a Price

Multiple Choice

Your firm currently sells 320 units a month at a price of $175 a unit. You think you can increase your sales by an additional 125 units if you switch to a net 30 credit policy. The monthly interest rate is.5 percent and your variable cost per unit is $94. What is the net present value of the proposed credit policy switch?

A) $1,506,500
B) $1,625,750
C) $1,875,000
D) $1,957,250
E) $2,092,750