A firm has been asked to consider a one-time credit sale under the following terms: Selling price
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Question:
A firm has been asked to consider a one-time credit sale under the following terms:
Selling price = $763,000
Variable cost ratio = 92%
Credit period = 120days (4 months)
Cost of funds = 3.5% (annual rate)
Default probability = 3.8%
Then, what is the expected NPV?
Related Book For
Financial Reporting And Analysis
ISBN: 9781260247848
8th Edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
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