Question

6. Your business has four suppliers that have provided goods and services to you this last month. They have sent you invoices asking for payment with the following terms: 1/5, n10 on an invoice of $1,200 of Crazy Eddie electronics. Enron WorldCom Arthur Anderson month of $800. 2/10,n30 on the utility bill of $230. 1/20 n60 on the telephone bill $410. 3/15 n20 for the accounting services last Business has been slow and you are short of cash. In addition, your customers are not getting you paid as fast as you would like. Which of the above should be paid first (list them in the order they should be paid and how much they will be paid) if you have only $2,000 in the next 30 days to settle the bills?

Answer 1

ANSWER:-

ANSWER: * Since the invoice of Crazy EDDIE needs to be Paid in net 10 days, if we pay within 5 days, a Cash discount of 1 % can be availed. This CRAZY EDDIE.... 12.00*(1-0.01) = $ 1,118 * Next We Day ENRON, to avail a of 2% discount They ENRON--- 230* (1-0.02) = $ 225.4 * Since bill needs to Setteled within the stipulated time, next lele pay ARTHUR ANDERSON * They ARTHUR ANDERSON - 800 *(1 -003) = $ 776. Due to restricted Cash, Worldcom will not be paid in the next 30 months. This discount cannot be availed This WORLDCOM .. $410.