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Hansen Corp. is considering extending trade credit to an existing customer who has been buying on cash terms. The customer has just placed a sales
Hansen Corp. 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 units if they receive a day credit period. Variable costs are $ per unit and involve an immediate cash outflow. The seller believes that there is a probability that the customer will default on the trade credit obligation. 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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