What Approximate Value Should a Firm Put on Being Able

question 83

Multiple Choice

What approximate value should a firm put on being able to permanently reduce the length of its collection period by one day if annual sales (all on credit) are $5,000,000 and the appropriate opportunity cost is 10 percent annually?

• A)$1,370
• B)$15,068
• C)$13,700
• D)$50,000

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Definitions:

Substitutes

Goods or services that can be used in place of each other, where the increase in the price of one leads to an increased demand for the other.

Coffee

A beverage made by grinding and brewing the seeds of the coffee plant, commonly consumed for its stimulating effects.

Tea

An aromatic beverage commonly prepared by pouring hot or boiling water over cured or fresh leaves of the Camellia sinensis plant.

Wage Rate

The amount of compensation or payment received by an employee per unit of time or piece of work completed.