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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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