Question: Dome Metals had credit sales of 180 000 yearly with credit
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?
Answer to relevant QuestionsDome Metals has credit sales of $180,000 yearly with credit terms of net 60 days, which is also the average collection period. Dome offered a 3 percent discount for payment in 18 days, and Dome reduced its bank loans, which ...Why does money have a time value?If you invest $9,000 today, how much will you have?a. In 2 years at 9 percent?b. In 7 years at 12 percent?c. In 25 years at 14 percent?d. In 25 years at 14 percent (compounded semiannually)?Mrs. Crawford will receive $7,600 a year for the next 19 years from her trust. If a 14 percent interest rate is applied, what is the current value of the future payments?If you owe $35,000 payable at the end of eight years, what amount should your creditor accept in payment immediately if she could earn 13 percent on her money?
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