Let us consider a customer who wants to buy an item produced by us. Let us suppose that the selling price of the product is $1,420. The production cost of that item is $1,120. The customer wants to buy that item by writing a check which is due after five months (he/she wants to pay after five months). 

Should we extend the trade credit or not given the annual interest rate is 17%?

Answer rating: 100% (QA)

To determine whether you should extend trade credit to the customer who wants to pay after five mont... View the full answer