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A seller is considering extending trade credit to an existing customer that buys on cash terms. The customer has just placed a sales order (
A seller is considering extending trade credit to an existing customer that buys 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 units 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? Ch: points
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