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Sir what is the working of this question
A company has sales of $200M per year currently customers take an average 40 days to pay
The company is considering offering a discount of 1% for payment within 15 days & expects that 60% of customer will take advantage of discount .
WHAT IS THE EFFECTIVE ANNUAL COST OF OFFERING THE DISCOUNT ? (Answer is in percentage)
Your message appeared at 01:00 my time – you are not going to get a reply in the middle of the night!!
Be patient – saying “I need a reply” is rude and will not get you a reply any faster. We say that we will answer within 24 hours, and I always do.The discount is 1/99 = 1.010101% over a period of 25 days (40 – 15).
The annual rate is therefore ((1.010101)^(365/25)) – 1 = 0.1580 (or 15.80%)
Sorry sir i was not meant to annoy u i was just waiting for a reply
If my act was annoying i am heartly sorry for my behaviour
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