1. The firm offers a Net 30 customer cash discount of 2/10. Suppose the customer order is for $1000, and the firm can invest the funds received from the customer on a short-term investment, what is the minimum effective annual rate the investment has to offer for the cash discount to be worthwhile to the firm?

Answer rating: 100% (QA)

To determine the minimum effective annual rate that the investment has to offer for the cash discount to be worthwhile to the firm we need to compare ... View the full answer