Chapter 7, Problem 24P

Problems 22-25 are a series and should be completed in order.

What will be the net gain or loss to the firm if Dome offers a 3 percent discount for payment in 18 days, every customer takes advantage of the new terms, and Dome reduces its bank loans, which cost 12 percent, by the cash generated from its reduced receivables? Should it offer the discount? Use the credit sales of $\text{\$180,000}$ yearly with credit terms of net 60 days for your calculation.