Optical Supply Company offers credit terms of 2/10, net 60. If Optical Supply is considering a change in its credit terms to one of those indicated below, explain whether the change should increase or decrease sales.
(a) 2/10, net 30;
(b) net 60;
(c) 3/15, net 60;
(d) 2/10, net 30,
The change would increase or decrease cash depending on the cost of not taking the discount using the new terms and comparing with the old terms. If the cost of not taking the discount increases, the sales would increase since more ...
The solution explains the impact on sales of a change in trade credit terms