Question
Funny Mask Company has received an order for its product totaling $350,000. The cost of goods sold is on average 30% of the sale amount.
Funny Mask Company has received an order for its product totaling $350,000. The cost of goods sold is on average 30% of the sale amount. Assume that the firm pays its supplier of fabric and other raw material at an average of 30 calendar days, that it takes a total of 10 days from the receipt at the warehouse to manufacture and sell the product. Clients take between 20 to 30 days to pay and the payment amount received daily during this period is constant = every day the same amount, (think here do not calculate for each day, make an assumption). Your adjusted discount rate is 5 %.
What is the NPV of this transaction?
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