Mine plc has annual credit sales of £15m and allows 90 days’ credit. It iscustomers will take advantage of the discount, while the volume of sales will notbe affected.

Mine plc has annual credit sales of £15m and allows 90 days’ credit. It iscustomers will take advantage of the discount, while the volume of sales will notbe affected. The company finances working capital from an overdraft at a cost ofconsidering introducing a 2 per cent discount for payment within 15 days, andreducing the credit period to 60 days. It estimates that 60 per cent of its10 per cent. Is the proposed change in policy worth implementing?

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