By offering 2 | 10, N | 30 credit terms to customers, a company automatically improves its profitability.

Question

Quizplus · Accepted Answer

Offering 2/10, N/30 credit terms may encourage early payments, improving cash flow, but doesn't automatically improve profitability. It can reduce the time to receive payments but may also decrease revenue due to the 2% discount offered for early payment. Profitability improvement depends on how these factors balance out and other operational efficiencies.

By Offering 2 | 10, N | 30 Credit Terms