30[Question text] Syarikat Sinergi is considering a new credit policy. The current policy is cash only. The new policy would involve extending credit for one period or net 30. Based on the following information, determine if the switch is advisable. The interest rate is 2.5% per period. CURRENT POLICYNEW POLICYPrice per unitRM175RM175Cost per unitRM130RM130Sales per period in units1,0001,100 Select one:A. Yes, the switch should be made because the NPV is RM8,000.B. No, the switch should not be made because the NPV is -RM8,000.C. Yes, the switch should be made because the NPV is RM4,500.D. No, the switch should not be made because the NPV is -RM4,500.

Extra earnings due to switch to new policy = increase in no. of units × profit per unit =…

Answered: 30 [Question text] Syarikat Sinergi is…

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

8th Edition

ISBN:9781285065137

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter5: Time Value Of Money

Section: Chapter Questions

Problem 41SP

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[Question text] Syarikat Sinergi is considering a new credit policy. The current policy is cash only. The new policy would involve extending credit for one period or net 30. Based on the following information, determine if the switch is advisable. The interest rate is 2.5% per period.

	CURRENT POLICY	NEW POLICY
Price per unit	RM175	RM175
Cost per unit	RM130	RM130
Sales per period in units	1,000	1,100

Select one:

A. Yes, the switch should be made because the NPV is RM8,000.

B. No, the switch should not be made because the NPV is -RM8,000.

C. Yes, the switch should be made because the NPV is RM4,500.

D. No, the switch should not be made because the NPV is -RM4,500.

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