ompany hasnual credit sales-$10 million Average collection period-60 days t 30. Interest rate=10%. The Garcia company proposes to offer discount po t 30. There will be 50% of its customers will take advantage of this new ult, the collection period will be reduced to 30 days. he Garcia Company offer the new credit terms?
ompany hasnual credit sales-$10 million Average collection period-60 days t 30. Interest rate=10%. The Garcia company proposes to offer discount po t 30. There will be 50% of its customers will take advantage of this new ult, the collection period will be reduced to 30 days. he Garcia Company offer the new credit terms?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:14.
Garcia Company hasnual credit sales-$10 million Average collection period=60 days.
Terms: Net 30. Interest rate=10%. The Garcia company proposes to offer discount policy of
2/10, net 30. There will be 50% of its customers will take advantage of this new policy.
As a result, the collection period will be reduced to 30 days.
Should the Garcia Company offer the new credit terms?
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