Because money has time value, a cash sale is always more profitable than a credit sale.

Name: Because money has time value, a cash sale is always more profitable than a credit sale.
Brand: Quizplus
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Question

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Department stores, auto dealers, and many others sell on credit, using interest bearing notes payable.the interest rate on this credit can exceed the firm's cost of capital, making credit sales more profitable than cash sales.

Because Money Has Time Value, a Cash Sale Is Always