Zebra company sells $73 million of its products to retailers on creidt terms of net 30. Its average collection period is 55 days. To speed up the collection of receivables the company is considering giving 1.5% cash discounts if customers pay with in credit terms. The company expects 60% of its customers to take the discount and its average collection period decline to 35 days. Zebra's required pretax rate of returns on receivable is 7%. Determine the net effect of offering the discount.
You live in UAE and have converted AED 700,000 into euros and invested them in europe. Todays exchange rate was AED 4.8/EURO. Over the year the investment earn a return of 7%. At the end of the year, the eurodepreciated by 6% relative to thedirham. After transfering the money back to the uae, what is your AED return on this european investment.