The North County Publishing Company has provided the following data:

North County Publishing proposes to offer a discount policy of 2/10, net 30. It anticipates that 50 percent of its customers will take advantage of this new policy. As a result, the collection period will be reduced to 30 days. Should the North County Publishing Company offer the new credit terms?

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Annual credit sales = $10 million = Average collection period 60 days Terms: Net 30 Interest rate 10% =