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-3. a. Onaaapo Ltd has a 12% opportunity cost of funds and currently sells on terms of net 10 End-of month (EOM). The firm has

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-3. a. Onaaapo Ltd has a 12% opportunity cost of funds and currently sells on terms of net 10 End-of month (EOM). The firm has sales of GH10,000,000 a year, which are 80% on credit and spread evenly over the year. Currently, the average collection period is sixty (60) days. If Odafomtim offered terms of 2/10, net 30, 60% of its customers would take the discount, and the collection period would be reduced to forty (40) days. Should Odafomtim change its terms from net/10 EOM to 2/10, net 30% (9 marks b. Explain the terms transaction risk and translation risk and describe the differences between them. (6 marks)

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