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initiating a cash discount gardener company currently makes all sales on credit and offers no cash discount. The firm is considering offering a 4% cash

initiating a cash discount
gardener company currently makes all sales on credit and offers no cash discount. The firm is considering offering a 4% cash discount for payment within 15 days. The firms current average collection period is 60 days, sales are 40,000 units selling price is $47 per unit and variable cost is $34 per unit. The firm expects that the change in credit terms will result in an increase in sales to 43,000 units, that 70% of sales will take the discount and the average collection period Will fall to 30 days. If the firms required rate of return on equal risk investments is 10% should the discount be offered?
note assume at 365 day year

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