The CBA Corporation is considering a new credit policy. The current policy is cash only. The new policy would involve extending credit of 'Net 30'. Based on the following information, determine if a switch in credit policy is advisable. The interest rate is 3 percent per month:
Current Policy New Policy
Price per unit RM 200 RM 200
Cost per unit RM 150 RM 150
Sales per month 1500 units 1700
units
