Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN: 9781337395083
Author: Eugene F. Brigham, Phillip R. Daves
Publisher: Cengage Learning
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Chapter 23, Problem 8MC
Summary Introduction
Case summary:
Person A the
She planned to use an example of Company’s “big ticket” items which is a customized computer microchip used in the company’s laptop. She planned to start the discussion by explaining some basic inventory concept. She asked person X to help her by way of answering the questions.
Characters in the case:
Person A- Financial manager of Company W
Person FW- CEO of the company
Person X-Assistant of person A
To determine: Whether Company W should take the discount.
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A specific model of computer servers are being sold by Company A for $26,700 each,
offering trade discounts of 8% and 6% and by Company B for $35,500 each, offering
trade discount rates of 13% and 3%.
a. Which company offers the servers for a cheaper price?
O A
o B
b. What further trade discount rate must the company with the higher price provide to
match the lower price?
%
You place an order for 1,100 units of Good X at a unit price of $48. The supplier offers terms of 3/30, net 40.
How quickly must you pay to get the discount?
b-3.
If you do take the discount, how much should you remit? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
c-1.
If you don’t take the discount, how much interest are you paying implicitly? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
You place an order for 1,500 units of Good X at a unit price of $52. The supplier offers
terms of 1/25, net 40.
How long do you have to pay before the account is overdue? If you take the full period,
how much should you remit. What is the discount being offered? how quickly must you
pay to get the discount? If you do take the discount, how much should you remit? if you
don't take the discount, how much interest are you paying implicitly? How many day's
credit are you receiving?
Chapter 23 Solutions
Intermediate Financial Management (MindTap Course List)
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
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