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(Solved): Firm ABC just received a purchase order for 115 units from a one-time buyer on cash terms at a price ...



Firm ABC just received a purchase order for 115 units from a one-time buyer on cash terms at a price of $12 per unit. The variable cost is $3 per unit. The firm believes that offering a 45-day credit period will increase the order quantity to 150 units. If the annual interest rate is 7.30%, what is the NPV of extending trade credit to the buyer?



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