Wontaby Ltd. is extending its credit terms from 30 to 45 days. Sales are expected to increase

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Wontaby Ltd. is extending its credit terms from 30 to 45 days. Sales are expected to increase from $4.7 million to $5.8 million as a result. Wontaby finances short-term assets at the bank at a cost of 10 percent annually. Calculate the additional annual financing cost of this change in credit terms.

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Foundations of Financial Management

ISBN: 978-1259024979

10th Canadian edition

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta

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