Question

The Berry Corporation is considering a change in its cash-only policy. The new terms would be net one period. The required return is 2% per period. Based on the following information, what is the break-even price per unit that should be charged under the new credit policy? Assume that the sales figure under the new policy is 2,600 units and all other values remain the same. Calculate the Breakeven price

Current Policy | New Policy | |||||

Price per unit | $ | 56 | $ | 58 | ||

Cost per unit | $ | 32 | $ | 32 | ||

Unit sales per month | 2,300 | 2,600 | ||||

Answer #1

The Snedecker Corporation is considering a change in its
cash-only policy. The new terms would be net one period. The
required return is 2 percent per period. Based on the following
information, what is the break-even price per unit that should be
charged under the new credit policy? (Do not round
intermediate calculations and round your answer to 2 decimal
places, e.g., 32.16.)
Current Policy
New Policy
Price per unit
$
56
?
Cost per unit
$
32
$...

The Snedecker Corporation is considering a change in its
cash-only policy. The new terms would be net one period. The
required return is 2 percent per period. Based on the following
information, what is the break-even price per unit that should be
charged under the new credit policy? (Do not round
intermediate calculations and round your answer to 2 decimal
places, e.g., 32.16.)
Current Policy
New Policy
Price per unit
$
56
?
Cost per unit
$
32
$...

The Harrington Corporation is considering a change in its
cash-only policy. The new terms would be net one period. The
required return is 2.5 percent per period. Current Policy New
Policy Price per unit $ 59 $ 61 Cost per unit $ 33 $ 33 Unit sales
per month 2,450 ? What is the break-even quantity for the new
credit policy? Break-even quantity

The Snedecker Corporation is considering a change in its
cash-only policy. The new terms would be net one period. The
required return is 2 percent per period.
Current Policy
New Policy
Price per unit
$
68
$
70
Cost per unit
$
36
$
36
Unit sales per
month
2,900
?
What is the break-even quantity
for the new credit policy? (Do not round intermediate
calculations and round your answer to 2 decimal places, e.g.,
32.16.)
Break-even
quantity...

The Snedecker Corporation is considering a change in its
cash-only policy. The new terms would be net one period. The
required return is 2 percent per period.
Current Policy
New Policy
Price per unit
$
84
$
86
Cost per unit
$
44
$
44
Unit sales per month
4,100
?
What is the break-even quantity for the new credit policy?
(Do not round intermediate calculations and round your
answer to 2 decimal places, e.g., 32.16.)

Devour, Inc., is considering a change in its cash-only sales
policy. The new terms of sale would be net one month. The required
return is 1.2 percent per month.
Current Policy
New Policy
Price per unit
$700
$700
Cost per unit
$455
$455
Unit sales per month
980
1,050
Required :
Based on the above information, determine the NPV of the new
policy.
rev: 09_21_2012
$1,171,916.67
$1,372,000.00
$711,316.67
$739,769.33
$3,365,483.33

Sanchez, inc., is considering a change in its cash-only sales
policy. the new terms of trade would be net one month. Based on the
following information, determine if the company should proceed or
not. Describe the buildup of receivables in this case. The required
return is .95 percent per month.
Current Policy New Policy
Price per
unit
$540
$540
Cost per
unit
$395
$395
Unit sales per
month 1080
1130

XYZ, Inc., is considering a change in its cash-only
sales policy. The new terms of sale
would be net one month.
Based on the following information, determine if the
company should proceed or not.
Describe the buildup of receivables in this case. The
required return is .95 percent
per month.
Current Policy
New Policy
Price per unit
$ 630
$ 630
Cost per unit
$ 495
$ 495
Unit sales per month
1,240
1,310

Sanchez, Inc., is considering a change in its cash-only sales
policy. The new terms of sale would be net one month. The required
return is .82 percent per month. Current Policy New Policy Price
per unit $ 960 $ 960 Cost per unit $ 765 $ 765 Unit sales per month
1,020 1,100 Calculate the NPV of the decision to switch. (Do not
round intermediate calculations and round your answer to 2 decimal
places, e.g., 32.16.)

Your firm is considering a new credit policy. While its current
policy is cash only, the new policy would involve extending credit
for one period. Based on the following information determine if a
switch is advisable if the interest rate is 2.0 percent per
period.
Current
Policy
New Policy
Price per
Unit
Tshs
1,750
Tshs 1,750
Cost per
Unit
Tshs
1,300
Tshs 1,300
Sales per Period
(Units)
10,000
11,000

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 3 minutes ago

asked 43 minutes ago

asked 56 minutes ago

asked 58 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago

asked 2 hours ago