Currently, Your Firm Sells 280 Units a Month at a Price

Multiple Choice

Currently, your firm sells 280 units a month at a price of $125 a unit. You think you can increase your sales by an additional 70 units if you switch to a net 30 credit policy. The monthly interest rate is.5 percent and your variable cost per unit is $80. What is the net present value of the proposed credit policy switch?

A) $574,237
B) $575,000
C) $589,400
D) $590,313
E) $592,600