GB Whole Trade is trying to decide whether to give credit to its retailers. To finance these credits. GSB must obtain a bank loan. The going and the best rate is from Bank A. which is at an effective rate of 22% per year. Should GSB decide to give credit to its retailers, the term should be used 1/10 N 60. GSB has only 10 retailers. The cost of monitoring the accounts should they be granted, will be very minimal and insignificant. Also, GSB expects no bad debts, its 10 customers have been in business for over 20 years. GSB is positive that all retailers are given a maximum of 15.000, which is expected to be all fully used up GSB-repriced its merchandise and added 2% to its whole prices. No. of retailers (10), Monthly sales without credit P100.00. with credit P250.000. 

Required: Should GSB grant credit to its retailers? Support your answer.

Answer rating: 100% (QA)

Yes G SB should grant credit to its retailers The company will be... View the full answer