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    Question

    A firm extends credit from 30 to 60 days to push sales,

    increasing receivables by ₹5 crore. Cost of capital is 12%. What is the annual carrying cost?
    A ₹60 lakh Correct Answer Incorrect Answer
    B ₹30 lakh Correct Answer Incorrect Answer
    C ₹1 crore Correct Answer Incorrect Answer
    D ₹50 lakh Correct Answer Incorrect Answer

    Solution

    Carrying cost = ₹5 crore × 12% = ₹60 lakh annually.

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