Question
The following data apply to C & A Textiles Limited. C & As required rate of return equals 0.0333 percent (daily). (4 marks) Days Cash
The following data apply to C & A Textiles Limited. C & As required rate of return equals 0.0333 percent (daily). (4 marks)
Days
Cash flows Existing Credit Policy
Proposed Credit Policy 0 (BDT 25000) (BDT 24200) 10 13000 13000 48 0 17500 59 17950 0
a. Calculate Net Present Value (NPV) for both policy. Interpret your answers. b. Show the impact on firms value if proposal is adopted (i.e., calculate change in NPV on a daily basis and change in value). Should the company change its credit policy? Why?
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Principles Of Managerial Finance
Authors: Lawrence J. Gitman, Chad J. Zutter
13th Edition
9780132738729, 136119468, 132738724, 978-0136119463
