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i cant figure this one out Initiating a cash discount Gardner Company currenty makes all sales on credt and offers no cash discount. The frm
i cant figure this one out
Initiating a cash discount Gardner Company currenty makes all sales on credt and offers no cash discount. The frm is considering ofloring a 4% cash discount for poyment within. 15 cayti. The firm's current average colloction period is 60 days, soles are 40,000 units, selling price is $47 per unit, and variable cost per unit is $32. The firm expects that the change in credit terms wit. result in an incresse in sales to 45,000 units, thot 70% of the swlos will take the dicoount, and that the avorage coloction pericd wil fali to 30 days. If the firm's required rate of retum on equat-risk investriens is 10\%, should the proposed discount be clered? (Note: Assume a 365-day yoar.) The addibional profit contribution from additional sales is $ (Round to the nearest dollac) Step by Step Solution
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