Cascade International Currently Has Credit Terms of Net 45 with No

question 148

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:

Per Unit

A term used to define the cost, price, or quantity relative to a single unit of a product or service.

Political Risk

The likelihood of financial loss or other adverse effects on investment outcomes due to political instability, government actions, or geopolitical tensions in a region.

Cultural Issues

Differences in beliefs, values, practices, and behaviors among people from different backgrounds, which can impact interactions and create challenges in various contexts.

Exchange Rates

The value of one currency for the purpose of conversion to another, indicating how much of one currency can be exchanged for another.