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A firm is considering relaxing its credit standards which will result in annual sales increasing from $1.50 million to $2.02 million. Costs of goods sold
A firm is considering relaxing its credit standards which will result in annual sales increasing from $1.50 million to $2.02 million. Costs of goods sold represent 49 percent of sales and the average collection period is expected to increase from 32 to 56 days. If the firm requires a return of 10.9 percent, what the cost of investing in the extra accounts receivables from the planned relaxation of credit standards?
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