Please assist with the following questions.  I need all of the answers
and formulas provided.

A firm currently makes only cash sales. It estimates that allowing
trade credit on terms of net 30 would increase monthly sales from 200
to 220 units per month. The price per unit is $101 and the cost (in
present value terms) is $80. The interest rate is 1 percent per month.

Assumptions:
Price per unit
Cost per unit
Current profits
Interest rate
Current sales 
Projected sales

a. Should the firm change its credit policy?

Present value of revenue per unit
Present value of profits

Conclusion

b. Would your answer to (a) change if 5 percent of all customers will
fail to pay their bills under the new credit
policy?

Default rate
Present value of profits

Conclusion

c. What if 5 percent of only the new customers fail to pay their
bills? The current customers take advantage
of the 30 days of free credit but remain safe credit risks.

Default rate of new customers
Present value of profits

Conclusion