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A company considered changing from payment by check, with a value date of 60 days (i.e., total credit period and disbursement float = 60 days),
A company considered changing from payment by check, with a value date of 60 days (i.e., total credit period and disbursement float = 60 days), to payment by automated clearing-house with a value date of 5 days. If the relevant cost of capital is 12%, what discount must this company receive in order to make this arrangement worthwhile?
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