Cash discounts-ROI . Calculate the approximate annual rate of return on investment of the following cash discount terms: 1. 1/15, n30. 2. 2/10, n60. 3. 1/10, n90. b. Which of these terms, if any, is not likely to be a significant incentive to the cus- tomer to pay promptly? Explain your answer.
Cash discounts-ROI . Calculate the approximate annual rate of return on investment of the following cash discount terms: 1. 1/15, n30. 2. 2/10, n60. 3. 1/10, n90. b. Which of these terms, if any, is not likely to be a significant incentive to the cus- tomer to pay promptly? Explain your answer.
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 13MC: Which of the following discounts future cash flows to their present value at the expected rate of...
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Cash discounts -
Annual credit sales of Nadak Co. total $340 million. The firm gives a 2% cash discount for payment within 10 days of the invoice date; 90% of Nadak's accounts receivable are paid within the discount period.
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