What Approximate Value Should a Firm Put on Being Able $\div$

question 61

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 annual sales/365 x 1 day \(\div\).10/365
• = \(\approx\) $3.75 per day in interest,

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