If a co. is given a trade term of net/10, but the avg collection period is 60days with a credit sale of 10mil, but if the co change it's trade term to2/10 net 30 and 60% of credit customer would take up the discount, and drop the average of collection term to 40 days? how do I go about and compare the term?
I was thinking of calculating the cost, but it seem the cost is more related to the receiving company not the co. that giving the discount. if anyone can help, would be much appreciated.