rfirm sells for cash only, but it is thinking of offering credit, allowing customers 90 days to pay. Customers understand the time value of money, so they would all walt and pay on the 90th day. To carry these receivables, you would have to borro ds from your bank at a nominal 8%, dally compounding based on a 360-day year. You want to Increase your base prices by exactly enough to offset your bank Interest cost. To the closest whole percentage point, by how much should you raise yo duct prices? Do not round Intermediate calculations. Round your answer to the nearest whole number.
rfirm sells for cash only, but it is thinking of offering credit, allowing customers 90 days to pay. Customers understand the time value of money, so they would all walt and pay on the 90th day. To carry these receivables, you would have to borro ds from your bank at a nominal 8%, dally compounding based on a 360-day year. You want to Increase your base prices by exactly enough to offset your bank Interest cost. To the closest whole percentage point, by how much should you raise yo duct prices? Do not round Intermediate calculations. Round your answer to the nearest whole number.
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
Problem 1PS
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Transcribed Image Text:Your firm sells for cash only, but it is thinking of offering credit, allowing customers 90 days to pay. Customers understand the time value of money, so they would all walt and pay on the 90th day. To carry these receivables, you would have to borrow
funds from your bank at a nominal 8%, dally compounding based on a 360-day year. You want to increase your base prices by exactly enough to offset your bank interest cost. To the closest whole percentage point, by how much should you raise your
product prices? Do not round Intermediate calculations. Round your answer to the nearest whole number.
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