Annualized rate = [Discount % / (100 - Discount %)] x [365 / (Full allowed payment days - Discount days)]
Annualized rate = (1 / 99) x [365 / (60 - 40)]
Annualized rate = 0.1843 or 18.43%
10. What is the annualized rate of not taking a 1/40 net 60 discount?
What are the annualized discount rate and your annualized investment rate on a Treasury bill that you purchase for $9,940 that will mature in 91 days for $10,000? 1.
What is the annualized discount and investment rate % on a Treasury bill that you purchase for $9,900 that will mature in 91 days for $10,000?
Intro A supplier hands you an invoice for $41,000 with the terms 3/10, net 60. I Attempt 1/5 for 10 pts. Part 1 What is the implicit interest rate (not annualized) you are charged if you forgo the discount and pay as late as possible? 3+ decimals Submit IB Attempt 1/5 for 10 pts. Part 2 What is the implicit interest rate (expressed as an annual percentage rate) you are charged if you forgo the discount and pay as late...
A supplier hands you an invoice for $48,000 with the terms 4/25, net 60. Part 1 What is the implicit interest rate (not annualized) you are charged if you forgo the discount and pay as late as possible?
Neveready Flashlights Inc. needs $490,000 to take a cash discount of 2/10, net 60. A banker will loan the money for 50 days at an interest cost of $7,400. a. What is the annual rate on the bank loan? (Use 365 days in a year. Do not round intermediate calculations. Round the final answer to 2 decimal places.) Annual rate % b. How much would it cost in percentage terms) ir the firm did not take the cash discount, but...
Neveready Flashlights, Inc. needs $410,000 to take a cash discount of 2/10, net 60. A banker will loan the money for 50 days at an interest cost of $6,600. a. What is the annual rate on the bank loan? (Use 365 days in a year. Do not round intermediate calculations. Round the final answer to 2 decimal places.) Annual rate % b. How much would it cost (in percentage terms) if the firm did not take the cash discount, but...
Neveready Flashlights Inc. needs $340,000 to take a cash discount of 2/10, net 60. A banker will loan the money for 50 days at an interest cost of $5,900. a. What is the annual rate on the bank loan? (Use 365 days in a year. Do not round intermediate calculations. Round the final answer to 2 decimal places.) Annual rate % b. How much would it cost (in percentage terms) if the firm did not take the cash...
Compute the annual approximate interest cost of not taking a discount using the following scenarios. What conclusion can be drawn from the calculations? 2/10 net 20 2/10 net 30 2/10 net 40 2/10 net 50 2/10 net 60 On January 2, 20X1, City Hospital established a line of credit with First Union National Bank. The terms of the line of credit called for a $200,000 maximum loan with an interest of 11 percent. Then compensating balance requirement is 15 percent...
2. Cash discount. Compute the cost of not taking the following cash discounts. a. 2/10, net 40. b. 2/15, net 30. c. 2/10, net 45. d. 3/10, net 90.
A firm offers terms of 1.4/10, net 60. a. What effective annual interest rate does the firm earn when a customer does not take the discount? (Use 365 days a year. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What effective annual interest rate does the firm earn if the terms are changed to 2.4/10, net 60, and the customer does not take the discount? (Use 365 days...