Cash Discount Go For Broke Mining was extended credit terms of 3/15 net 30 EOM. The...
Cash Discount
Go For Broke Mining was extended credit terms of 3/15 net 30 EOM.
The cost of giving up the cash discount, assuming payment would be made on the last day of the credit period, would be ________. If the firm were able to stretch its accounts payable to 60 days without damaging its credit rating, the cost of giving up the cash discount would only be ________.
Homework Answers
Cost of giving up the cash discount = (Disc.%/100 - Disc.%) × [365 / (Days Credit Outstanding – Discount Period)]
Cost of giving up the cash discount = (3/97) × [365 / (30 - 15)] = 75.26%
If the firm were able to stretch its accounts payable, the cost of giving up the cash discount would only be:
Cost of giving up the cash discount = (3/97) × [365 / (60 - 15)] = 25.09%
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Cash Discount
Go For Broke Mining was extended credit terms of 3/15 net 30
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please complete part C only! Thank you in advance! s Question Help Credit terms Purchases made...
please complete part C only!
Thank you in advance!
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please use control scroll wheel to view the
question if it is not visible.
Early Payment discount decisions Prairie Manufacturing has four possible suppliers, all of which offer different credit terms. Except for the differences in credit terms, their products and services are virtually identical. The credit terms offered by these suppliers are shown in the following table: E: (Note: Assume a 365-day year.) a. Calculate the approximate cost of giving up the cash discount from each supplier. b. If...
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3. e-Five Corp. does not presently offer a cash discount and sells on net 30 terms. However, the firm would like to offer a cash discount for payments made on day 10 to retain its customers as many of the firm's competitors have begun to sell on terms of 1.5/10, net 30. Assuming the firm's cost of funds is 17%, what is the maximum cash discount the firm can offer? What is the optimal discount? (Assume no change in sales)
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...
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