A seller has offered credit terms of 2/5 net 60 to a customer that has agreed...

 

 

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A seller has offered credit terms of 2/5 net 60 to a customer that has agreed to immediately purchase 200 units at a sales price per unit of $100. Variable costs are $65 per unit and involve an immediate cash outflow. The seller has an annual opportunity cost rate of 7.3%. Based on this information, what is the present value of the net cash flows associated with the cash discount terms? A seller has offered credit terms of 2/5 net 60 to a customer that has agreed to immediately purchase 200 units at a sales price per unit of $100. Variable costs are $65 per unit and involve an immediate cash outflow. The seller has an annual opportunity cost rate of 7.3%. Based on this information, what is the present value of the net cash flows associated with the cash discount terms?

Answer rating: 100% (QA)

SOLUTION To calculate the present value of the net cash flows associated with the cash discount terms we need to consider the cash flows from the customers perspective Given Sales price per unit 100 V... View the full answer