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How Much Value Would Be Added to a Firm That ÷\div

Question 103

Multiple Choice

How much value would be added to a firm that could permanently reduce its collection period by two days if daily collections average $10,000 and the opportunity cost is 5 percent annually?


A) $1,000
B) $1,200
C) $10,000
D) $20,000
daily interest = $10,000 x 2 x .05 ÷\div 365
= $2.7397
Present value of daily interest =

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