Cascade International Currently Has Credit Terms of Net 45 with No

question 67

Multiple Choice

Cascade International currently has credit terms of net 45 with no discount and an average collection period of 48 days. Cascade believes that if it offered a 2/15 discount, 60% of its sales would be collected within the discount period and the remaining customers would pay in 50 days. By how many days will Cascade's average collection period change if the discount policy is adopted?

• A) -29 days
• B) -28 days
• C) -19 days
• D) -10 days
• E) 2 days

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Definitions:

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