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A firm in a competitive industry institutes a change in credit policy that allows buyers more advantageous terms than before and drops its prices by
A firm in a competitive industry institutes a change in credit policy that allows buyers more advantageous terms than before and drops its prices by 5 percent. Unless _____, the change will almost certainly be a negative NPV investment.
a. sales quantity remains constant | ||
b. most of the seller's costs are variable costs | ||
c. the seller is planning to offer a cash discount | ||
d. sales increase | ||
e.customers actually take advantage of the new terms |
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