Triumph Corporation extends credit to many of its customers, and sets the term o

Question

Triumph Corporation extends credit to many of its customers, and sets the term of these credits at:

2/10; net/60

Triumph has noted that many of its credit customers choose not to take the discount, a concern of the company. Which of the following 6 choices would, by itself, result in more customers taking the discount?

There may be more than one correct answer. To receive credit you must check all choices that apply - that is - check all choices that, by itself, would result in more customers taking the discount.

net/50 instead of net/60 2/5 instead of 2/10 1/10 instead of 2/10 net/70 instead of net/60 2/15 instead of 2/10 3/10 instead of 2/10

Explanation / Answer

Options :

The repayment period is increasing and hence, if the customer doesnot avail the discount, it is beneficial for him.

Sl No. Option Acceptance Reason 1 net/50 instead of net/60 No This is because here the repayment days are decreasing and would not provide any benefit to the customer. 2 2/5 instead of 2/10 No The days to avail the discount is decreasing and hence not profitable to the customer. 3 1/10 instead of 2/10 No The discount is decreasing even though the period for payment remains same hence not profitable to the customer. 4 net/70 instead of net/60 Yes

The repayment period is increasing and hence, if the customer doesnot avail the discount, it is beneficial for him.

5 2/15 instead of 2/10 Yes If the customer wishes to avail the discount the period for repayment is increasing in this case. Hence, it is profitable to the customer. 6 3/10 instead of 2/10 Yes The discount is increasing for the same repayment period. Hence, profitable to the customer.

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