Peaches Creamery Ltd

question 9

Multiple Choice

Peaches Creamery Ltd. would like to reduce the average number of days it takes to collect its receivables from 60 days down to 30 days. Peaches thinks this can be accomplished by offering a 1% discount to customers who pay withing 30 days. Precisely what is a customer's annualized cost of forgoing the discount?

• A) 6.1%
• B) 6.2%
• C) 11.1%
• D) 12.2%
• E) 13.0%

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Definitions:

Forecasting Realities

The process of making predictions based on data and recognizing the limitations and uncertainties associated with future events.

Market Demands

The total amount of a product or service that consumers are willing and able to purchase at a given price.

Strength Relationship

The degree to which two variables are related or associated with each other, often used in the context of correlation analysis.

Forecasting Time Horizons

The periods into which future predictions or plans for business, economic, or other activities are divided, ranging from short-term to long-term.