AFP
CTP · Question #672
(Topic 7) A company offers credit terms of net 40, with an opportunity cost of 12% to a customer. What discount would have to be offered for the customer to be indifferent between paying on Day 40…
The correct answer is A. 1.0%. See the full explanation below for the reasoning.
Question
- (Topic 7)
A company offers credit terms of net 40, with an opportunity cost of 12% to a customer. What discount would have to be offered for the customer to be indifferent between paying on Day 40 and paying with the discount on Day 10?
Options
- A1.0%
- B1.3%
- C1.6%
- D2.0%
How the community answered
(29 responses)- A83% (24)
- B7% (2)
- C7% (2)
- D3% (1)
Community Discussion
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