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thank you for the time and effort! 15. (Discounts) A company with annual sales of $2,500,000 on terms of net 30 and a collection period

thank you for the time and effort!
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15. (Discounts) A company with annual sales of $2,500,000 on terms of net 30 and a collection period of 40 days (assume a 360-day year) is considering of- fering its customers terms of 2/15, net 30. The com- pany forecasts that 60% of the customers would take % the discount and pay on day 15 while the remaining 40% would pay on day 35 on average. Customers are . also expected to increase their purchases by $100,000, and the company forecasts that its idle cash balance would decrease by $60,000. The company's variable costs average 75% of sales, it pays taxes at a 21% rate, and it has a 10% cost of capital. a. Calculate the incremental cash flows from accept- ing this proposal. b. Organize your cash flows from part a into a cash flow spreadsheet. c. Calculate the proposal's NPV, IRR, and NAB. d. Should the company offer the discount? a

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