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A firm currently makes all sales on credit for up to 3 0 days and offers no cash discount. The unit variable cost and selling
A firm currently makes all sales on credit for up to days and offers no cash discount. The unit variable cost and selling price are INR and INR The management is considering a fourpercent cash discount for payment within ten days. The sales are expected to increase by from the current units, and the average collection period will fall from days to days as fifty percent of sales are expected to avail a discount and pay by day ten. Should the proposed discount be offered, assuming no change in the working capital requirement, no bad sales, and zerotax?
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