Your company has been offered credit terms on its purchases of 4/30, net 90 days. What will be the nominal annual cost of trade credit if your company pays on the 35th day after receiving the invoice? (Assume a 365-day year.) a. 30% b. 304% c. 3% d. 87% e. 156%

Q: A firm is offered trade credit terms of 3/15, net 30 days. The firm does not take the discount, and…

A: Credit terms of 3/15, net of 30 days, Number of days to repay the loan is 50 days

Q: National Co. sells on terms 3/10, net 30. Total sales for the year are P900,000. Thirty-five percent…

A: Sales = P 900000 35% pay on 10th day and 65% pay on 45th day. Let's find the days sales outstanding.

Q: On average, how much “free” trade credit does the firm receive during the year?

A: Free trade credit refers to the payment made by a firm within the discount period whereas when the…

Q: Your company was charged $44.19 interest on an overdue amount of $6,275 that was 20 days overdue.…

A: The interest is the fixed financial charge which is required to be paid by the borrower to the…

Q: Bulldogs Inc. sells on term 3/20, net 40. Total sale for the year are P1,200,000 on which 40% is…

A: Total Sales =  P1,200,000 Cash Sales = 40%

Q: Company X sells on a 3/10, net 90, basis. Company Y buys goods with an invoice of $2,500. a. How…

A: Calculation of Deduction Amount, Extra Credit Days and Effective Annual Rate: Excel Spreadsheet:…

Q: Inc. sells on term 3/20, net 40. Total sale for the year are P1,200,000 on which 40% is cash sales.…

A: Accounts Receivable Accounts receivable is considered to be one of the main sources of revenue which…

Q: GFB Co. buys on terms of 2/15, net 30 days. It does not take discounts, and it typically pays 30…

A: Free Trade credit refers to a type of financing wherein the buyer gets a credit period of…

Q: What is the nominal annual percentate cost of the non-free trade credit if it pays within 120 days…

A: Nominal annual % cost of non-free trade credit = [ { Discount / ( 1 - Discount ) } x { 365 / ( Days…

Q: Fil Development buys on terms of 2/15, net 60 days. It does not take discounts, and it typically…

A: Accounts payables are the liabilities which arises due to credit purchases from the suppliers. The…

Q: Company X sells on a 2/10, net 90, basis. Company Y buys goods with an invoice of $1,500.   a. How…

A: Given values: Invoice value = $ 1500 if paid within 10 days discount = 2% with in 90 days it should…

Q: PPG Co. buys on terms of 2/15, net 30 days. It does not take discounts, and it typically pays 30…

A: Credit financing is a type of financing in which a purchase is made on credit, that is, the purchase…

Q: rate per period? The number of compounding period is ___ How many days are there per

A: Number of days per period are as follows:

Q: Bulldogs Inc. sells on term 3/20, net 40. Total sale for the year are P1,200,000 on which 40% is…

A: Average amount of account Receivable = Days of sales outstanding x Sales / 360 Days of Sales…

Q: Haumea has been offered credit terms of discount of four percent if paid within thirty days, if not…

A: When goods are sold on credit, the seller extends short term finance to the buyer to make the…

Q: H. CANSY Merchandising borrowed P800,000 from ABC Bank at 10% simple interest or one year and six…

A: H) Amount borrowed (A) = P 800000 r = 10% simple interest rate n = 1 year 6 months = 1.5 years

Q: c. What is the effective annual rate of interest if Y pays on the due date rather than day 15? (Use…

A: Given, Invoice amount=$ 1,500 1/15, net 60, basis which means if company y pays within 15 days then…

Q: HBC Inc. buys on terms of 2/10, net 30 days. It does not take discounts, and it typically pays 30…

A: The question is related to the Free trade Credit. The details are given.  First we will calculate…

Q: A company buys on terms of 2/15, net 30 days. It does not take discounts, and it typically pays 35…

A: Nominal Annual Cost = Discount percent(100-Discount percent) × 365 daysTotal Pay period - Discount…

Q: Given an annual credit sales value of 365 million; accounts receivable beg. 36.5 million, cost of…

A: Solution:- Average Collection Period means the average days it takes a firm to collect money from…

Q: Illustration: A company sells $50,000 of goods with the terms net/30. The receivable is immediately…

A: Sales price = $50,000 Factor fee = 3% Interest = 10% reserve = 8%

Q: Assume that you start with a balance of $3600 on your credit card. During the first month, you…

A: Given Starting balance is $3600 First month charge is $400 Second month charge is $550

Q: Within 10 days following a sale, a company receives payment of a $20,000 account receivable with…

A: Sales discount = Accounts receivable x rate of discount

Q: MULTIPLE CHOICE  Milch Corporation sells on terms of net/90. Their accounts receivable are on…

A: The average investment in receivables can be estimated with the help of days sales outstanding…

Q: AL Enterprises purchases P4,562,500 in goods per year from its sole supplier on terms of 2/15, net…

A: Discount rate = 0.02 (i.e. 2%) Allowed payment days = 50 Discount days = 15

Q: Kirk Development buys on terms of 2/15, net 60 days.  It does not take discounts, and it typically…

A: The calculation is:

Q: Question 36 A company has daily purchases of $10,000 from its supplier.  The supplier offers trade…

A: Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-parts at a…

Q: A store will give you a 1.75% discount on the cost of your purchase if you pay cash today.…

A: The concept of the time value of money states that the same amount of money is worth more today than…

Q: Lux Co. sells on terms 3/10, net 30. Total sales for the year are P900,000. Thirty-five percent of…

A: Sales per day = Total sales / 360 Sales per day = P900,000 / 360 Sales per day = P2,500 Days' sales…

Q: Problem A DEF has total forecasted gross purchases of P4,500,000 relating to a major supplier for…

A: Note: I am supposed to provide the solution to problem 1 only. Please repost the remaining questions…

Q: The major supplier of SS Corp. offers credit terms of 2/10, n / 35 What is the net benefit (in rate…

A: If the payment is made within 10 days the recipient will get a 2% discount and if the payment is…

Q: Sasakyani Company sells to retail auto supply stores on credit terms of 2/10, n/30. Annual credit…

A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Radio Shack offers credit to its customers and charges interest of 1.2 percent per month. What is…

A: In the given question we require to calculate the Annual Percentage rate if the per month interest…

Q: A firm is offered trade credit terms of 3/15, net 30 days. The firm does not take the discount, and…

A: SOLUTION-   WORKING- NUMBER OF DAYS ARE THERE PER PERIOD IS 50-15 = 35 DAYS.

Q: Black Panther Inc. buys on terms of 2/15, net 60 days. It does not take discounts, and it typically…

A: Net purchases = P450,000 Terms of credit = 2/15,net 60 days

Q: NEKO Inc. sells on term 3/20, net 40. Total sale for the year are P1,200,000 on which 40% is cash…

A: Calculation of days of sales outstanding   = 30% x 20 = 6 days    Calculation of credit sales =…

Q: FP Co. buys on terms 2/10, net 30, but generally does not pay until the 40 days after invoice date.…

A: Trade credit means purchasing of trade goods on credit basis. If there is any discount period, then…

Q: Your office supply has a line of credit that charges an annual percentage rate of prime rate plus…

A: Given information: Balance of office supply line of credit on different dates of March. Annual…

Q: Queen Corp sells on terms of 2/10, n/30. 70% of customers normally avail of the discounts. Annual…

A: The calculation of average accounts receivable has been made as follows:

Q: The major supplier of SS Corp. offers credit terms of 2/10, n/35. What is the net benefit (in rate…

A: Here Credit terms 2/10, n/35 means SS Corp will get 2% discount if SS Pays within 10 days Here we…

Q: Calla Lily Corp. purchases on terms of 2/8, net 45 days, does not accept discounts, and pays after…

A: Time = 45 days Terms = 2/8 Pay after A = 58 days Year y = 365 days

Q: wed 12,000 by signing a

A: Note value $12000   Days 120   Interest rate 15%         Interest due on maturity…

Q: A firm is offered trade credit terms of 3/15, net 45 days. The firm does not take the discount, and…

A: Nominal Annual Cost = Discount percent(100-Discount percent) × 365 daysTotal Pay period - Discount…

Q: Black Panther Inc. buys on terms of 2/15, net 60 days. It does not take discounts, and it typically…

A: Credit terms indicate the percentage discount a firm can take off the invoice amount if payments…

Q: An automobile dealership offers a car with $0 down payment, $0 first month’s payment, and $0 due at…

A: The present value of cash flow is the current worth of a cash flow at a certain rate of interest and…

Q: Company X sells on a 2/15, net 90, basis. Company Y buys goods with an invoice of $1,000.   a. How…

A: Credit sale term =2/15, net 90 Company Y buys goods of =$1000 Meaning of 2/15, net 90: It means if…

Q: A. DEF has total forecasted gross purchases of P4,500,000 relating to a major supplier for the…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…