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Financial Management: Tinbergen Cans expects sales next year to be $50,000,000. Inventory and accounts receivable (combined) will increase $8,000,000 to accommodate this sales level. The

Financial Management: Tinbergen Cans expects sales next year to be $50,000,000. Inventory and accounts receivable (combined) will increase $8,000,000 to accommodate this sales level. The company has a profit margin of 6 percent and a 30 percent dividend payout. How much external financing will the firm have to seek? Assume there is no increase in liabilities other than that which will occur with the external financing. A. What does trade credit of 2/10, net 30 mean? B. What is the cost of not taking the discount on trade credit of 2/10, net 30? C. If the firm changes the trade credit to 2/5, net 30, do accounts receivable increase, decrease or remain the same?

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