Cost of giving up cash discounts Determine the cost of giving up the cash discount under each of the following terms of sale. (Note: Assume a 365-day year.) 3/10 net 90 1/10 net 60 3/10 net 30 4/10 net 180
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Cost of giving up cash discounts Determine the cost of giving up the cash discount under each of the following terms of sale. (Note: Assume a 365-day year.)
3/10 net 90
1/10 net 60
3/10 net 30
4/10 net 180
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- Required: a. A firm currently offers terms of sale of 3/25, net 50. Calculate the effective annual rate. a-1. Calculate the effective annual rate if the terms are changed to 4/25, net 50. a-2. What effect does an increase in the discount rate have on the implicit interest rate charged to customers that pass up the discount? b-1. Calculate the effective annual rate if the terms are changed to 3/35, net 50. b-2. What effect does a decrease in the extra days of credit have on the implicit interest rate charged to customers that pass up the discount? c-1. Calculate the effective annual rate if the terms are changed to 3/25, net 40. c-2. Is there any difference between the implicit interest rate for terms of 3/35, net 50 and 3/25, net 40?Note: Round all answers to the nearest cent when necessary. Calculate the amount financed, the finance charge, and the total deferred payment price (in $) for the following installment loan. Purchase(Cash)Price DownPayment AmountFinanced MonthlyPayment Number ofPayments FinanceCharge TotalDeferredPaymentPrice $2,800 0 185.69 18P16–2 COST OF GIVING UP THE EARLY PAYMENT DISCOUNTS Determine the cost of giving up the early payment discount under each of the following terms of sale. (Note: Assume a 365-day year.) 2/10 net 30. 1/10 net 30. 1/10 net 45. 3/10 net 90. 1/10 net 60. 3/10 net 30. 4/10 net 180.
- Tamil Traders LTD was extendend credit terms of 2/10 net 70. thw cost of giving up the cash discount asuming a 365 day year isNeed help with C only Company X sells on a 1/15, net 60, basis. Company Y buys goods with an invoice of $1,500. a. How much can company Y deduct from the bill if it pays on day 15? (Do not round intermediate calculations.) $15 b. How many extra days of credit can company Y receive if it passes up the cash discount? 45 days c. What is the effective annual rate of interest if Y pays on the due date rather than day 15? (Use 365 days in a year. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) ???Which of the 3-5 year notes might be considered cheap? Group of answer choices O. HON 3.25 12/01/23 O. ITW 3 1/2 03/01/24 O. HON 2.3 08/15/24 O. HON 1.35 06/01/25
- What is the PV of $200 received in: a. Year 8 (at a discount rate of 4%)? b. Year 8 (at a discount rate of 16%)? c. Year 13 (at a discount rate of 28%)? d. Each of years 1 through 3 (at a discount rate of 15%)? Note: For all requirements, do not round intermediate calculations. Round your answers to 2 decim. a. Present value b. Present value c. Present value d. Present valueWhat amount will reduce the amount due on an invoice of $2425 24 by $1180.77 if the terms of the invoice are 1/15, n/30 and the payment was made during the discount period? The payment amount is $ (Round to the nearest cent as needed.)a. Annual payment b. Semiannual payments c. Quarterly payments d. Monthly payments If you borrow $9,500 at $760 interest for one year, what is your annual interest cost for the following payment plan? (Round the final answers to 2 decimal places.) Effective rate elp Save & Exit % 4 Submi
- Buy On Time or Pay Cash Cost of Borrowing 1. 2. 3. 4. 5. 6. 7. 8. Cost of Paying Cash 9. 10. Terms of the loan a. Amount of the loan b. Length of the loan (in years) c. Monthly payment Total loan payments made ($ per month Less: Principal amount of the loan Total interest paid over life of loan Tax considerations: - Is this a home equity loan? - Do you itemize deductions on your federal tax return? What federal tax bracket are you in? Taxes saved due to interest deductions ($ %) Total after-tax interest cost on the loan X months) Annual interest earned on savings (6% X Annual after-tax interest earnings ($ %) X $10,000.00 5 $188.70 no yes 35% $ $ $ 00 00 $Calculate the nominal annual cost of no free trade credit under each of the following terms. Assume that payment is made either on the discount date or on the due date. a. 1/15, net 20 b. 2/10, net 60 c. 3/10, net 45 d. 2/10, net 45 e. 2/15, net 40Computing Annuity Amounts Under Different Situations Answer the questions to the following four separate scenarios. For #1 to #3, round your answer to the nearest whole dollar. For #4 and #5, round percentage to two decimal places (for example, enter 8.54 for 8.5444%). Do not use a negative sign with your answer. On January 1, Jin owed a debt of $12,104. An agreement was reached that she would pay the debt plus compound interest in 24 monthly installments of $560, the first payment to be made at the end of January. What rate of annual interest is she paying? Answer
