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A seller is considering extending trade credit to an existing customer who has been buying on cash terms. The customer has just placed a sales
A seller is considering extending trade credit to an existing customer who has been buying on cash terms. The customer has just placed a sales order cash terms for immediate delivery of units at a sales price per unit of $ The customer states that they will increase their sales order by if they receive a day credit period. Variable costs are $ per unit and involve an immediate cash outflow. If the seller has an annual opportunity cost rate of what is the NPV of extending credit to the customer?
a $
b$
c$
d $
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