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Hi John. There’s a qn that I am facing massive problems with.
Please could you assist me:
Lowe and Pricce Co. have annual credit sales of 12m$ and three months are allowed for payment. The company decides to offer a 2% discount for payments made within to two months. It is estimated that 50% of customers will take the discount. If the company requires a 20% return on investment, what will be the effect of the discount; assuming volume of sales remains unaffected.
The answer is 247,123$ (net benefit of the discount)
Please help me!
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