Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Wontaby Ltd . is extending its credit terms from 4 5 to 6 0 days. Sales are expected to increase from $ 4 . 8

Wontaby Ltd. is extending its credit terms from 45 to 60 days. Sales are expected to increase from $4.89 million to $5.99 million as a result. Wontaby finances short-term assets at the bank at a cost of 12 percent annually. Calculate the additional annual financing cost of this change in credit terms. (Use 365 days in a year. Do not round intermediate calculations. Round the final answer to the nearest whole dollar. Enter answer in whole dollar not in million.)
Annual financing cost $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance for Executives Managing for Value Creation

Authors: Gabriel Hawawini, Claude Viallet

4th edition

9781133169949, 538751347, 978-0538751346

More Books

Students also viewed these Finance questions