What is the annual return (yield) for the customers who take

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Question: XYZ Corporation has a 10% opportunity cost of funds. The firm has annual sales of $30 million a year, which are 80% on credit and spread evenly over the year. The average collection period is currently 60 days. XYZ is considering to offer terms of "2/10, net 60".

What is the annual return (yield) for the customers who take the discount? (nominal rate assuming 360 days a year)

Reference no: EM133377505

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