Dome Metals had credit sales of $180,000 yearly with credit terms of net 60 days, which is
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Dome Metals had credit sales of $180,000 yearly with credit terms of net 60 days, which is also the average collection period. If Dome offered a 3 percent discount for payment in 18 days and every customer took advantage of the new terms and reduced its bank loans, which cost 12 percent, by the cash generated from its reduced receivables, what will be the net gain or loss to the firm? Should it offer the discount?
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Related Book For
Foundations of Financial Management
ISBN: 978-1259194078
15th edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
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