A seller has offered credit terms of 2.5/5 net 50 to a customer that has agreed...

 

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A seller has offered credit terms of 2.5/5 net 50 to a customer that has agreed to immediately purchase 500 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 2.5/5 net 50 to a customer that has agreed to immediately purchase 500 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)

To calculate the present value of the net cash flows associated with the cash discount terms we nee... View the full answer