Question

please complete part C only!

Thank you in advance!

s Question Help Credit terms Purchases made on credited in by the end of the big period. Many forms extend a discount for payment made in the first part of the ring period. The original invoice contains type of shorthand nation that the creditors that apply. (Note Assume a 365-day year) a Write the short and expression of credit barns for each of the following b. For each of the set of credit forms in porta calce the number of days until payment is du for vis dated March 12 For each of the sets of credit calculate the cost of giving up the cash count d. If the firm's out of short-term financing is 87%, what would you recommend in regard to taking the discount or giving it up in each case? a. The shorthand expression of the credit forms 1 1.6 / 12 net 38 date of invoice i Data Table The shorthand expression of the creditems 2: 24/7 net 35 EOM - (Rour The short hand expression of the credit forms 3 21 17 net 20 date of invoice. Pour The short and expression of the creditors 4 is: 13/7 et 60 EOM (Rou b. Credit Serms is due in 30 days (Pound to the nearest Integer.) (Chick on the con located on the top right comer of the datatable below in order to copy is contents into a spreadshot) Beginning of Cash discount discount period Credit period credit period date of invoice end of month Credit terms 2 is due in 54 days (Round to the nearest Integer) Credits 3 is due in 28 days. (Round to the nearest Integer.) end of month Crest forms 4 is due in 7 days. (Round to the nearest Integer) c. Cost of giving up the cash discount for case . Hound to two decimal places)

Answer 1

Cost of giving up discount :  

Cash discount / (100%- Cash discount) x 365/N

1.6%/(100%-1.6%) x 365/(38-12) = 0.2283 = 22.83%

2.4%/(100%-2.4%) x 365/(35-7) = 0.3205 = 32.05%

2.1%/(100%-2.1%) x 365/(28-7) = 0.3729 = 37.29%

1.3% /(100%-1.3%) x 365 (60-7) = 0.0907 = 9.07%