Problemcredit analyst john adams is considering a 1000, Ask an Expert

Accounting

Problem:

Credit analyst John Adams is considering a $1,000 order from a new customer. The cost of filling the order is $950. John estimates collection costs are $20. The customer will pay in 60 days.

Required:

Question: If the appropriate cost of capital is 18%, what is the NPV of extending credit to the new customer?

Note: Provide support for your rationale.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91171406

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