Question
Your account with Connies Homes is bringing in $250,000 per year. The deal youve worked out is that she pays you in 35 days. She
Your account with Connies Homes is bringing in $250,000 per year. The deal youve worked out is that she pays you in 35 days. She wants a 2.5% price reduction and says shell pay within two weeks (14 days). Your risk-adjusted cost of capital on this account is 13.75%, and your marginal tax rate is 34%. What is the present value of each alternative? Are you happy with the proposed terms? Use a 365-day year. Please, answer with details on the calculations. Im asking this for the 2nd time because I cant figure out the step by step of whoever answered the first time
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