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Alpha Tires is thinking of making changes in its cash only policy for sales. These are the numbers they think will be made from the changes to new credit terms of 1 period.

Alpha Tires is thinking of making changes in its cash only policy for sales. These are the numbers they think will be made from the changes to new credit terms of 1 period. Price per unit = $81 Price per unit for new policy = $84 Cost per unit = $47 Cost per unit (new policy) = $47 Unit Sales for the period = $3280 Unit Sales for the period (new policy) = $3390 Given these numbers and with a required rate of 2.3% per period, is this a good idea? Why?

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