New Products Currently Sells a Product with a Variable Cost

New Products currently sells a product with a variable cost per unit of $23 and a unit selling price of $49. At the present time, the firm only sells on a cash basis with monthly sales of 733 units. The monthly interest rate is .48 percent. What is the value of Q' at the switch break-even point if the firm adopted a net 30 credit policy? Assume the selling price per unit and the variable costs per unit remain constant.

A) 739.66 units
B) 736.34 units
C) 728.47 units
D) 740.29 units
E) 743.18 units

Correct Answer:

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