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Fred Davis is a finance director of a large industrial products enterprise. The enterprise offers debtors a 2% discount for payment within 10 days. The

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Fred Davis is a finance director of a large industrial products enterprise. The enterprise offers debtors a 2% discount for payment within 10 days. The average collection period of the enterprise is 28 days. Fred contents that the discount should be dropped. His estimates are that the average collection period would increase to 30 days, and the enterprise would save 3% on all accounts taking the discount. (Thirty percent of the enterprises' customer currently take the discount. The marketing manager estimates that the sales would drop from 21,000 to 20,000 units. The enterprise has a 20% required rate of return on investments. If the selling price per unit is $22, average cost per unit is $20 (at the current sales volume) and variable cost is $17 per unit, should the enterprise discontinue the discount

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