10. SM Supermarket purchases P4,562,500 in goods over a 1-year period from its sole supplier. The supplier offers trade credit under the following terms: 2/15, net 50 days. If Hayes chooses to pay on time but not to take the discount, what is the average level of the firm's accounts payable, and what is the effective annual cost of its trade credit? (Assume a 365-day year.) A. P208,333; 17.81% D. P416,667; 27.43% B. P416,667; 17.54% E. P625,000; 23.45% C. P625,000; 17.54%
10. SM Supermarket purchases P4,562,500 in goods over a 1-year period from its sole supplier. The supplier offers trade credit under the following terms: 2/15, net 50 days. If Hayes chooses to pay on time but not to take the discount, what is the average level of the firm's accounts payable, and what is the effective annual cost of its trade credit? (Assume a 365-day year.) A. P208,333; 17.81% D. P416,667; 27.43% B. P416,667; 17.54% E. P625,000; 23.45% C. P625,000; 17.54%
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter21: Supply Chains And Working Capital Management
Section: Chapter Questions
Problem 10MC
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![10. SM Supermarket purchases P4,562,500 in goods over a 1-year period from its sole supplier. The supplier offers trade
credit under the following terms: 2/15, net 50 days. If Hayes chooses to pay on time but not to take the discount,
what is the average level of the firm's accounts payable, and what is the effective annual cost of its trade credit?
(Assume a 365-day year.)
A. P208,333; 17.81% D. P416,667; 27.43%
B. P416,667; 17.54% E. P625,000; 23.45%
C. P625,000; 17.54%
11. Mr. Jones borrows P2,000 for 90 days and pays P35 interest. What is his effective rate of interest?
A. 7.0%
C. 11.7%
D. none of these
B. 9.3%
12. Ms. Smith borrowed P125,000 at 11% stated rate of interest and was to pay back the loan in 24 monthly
payments. What is her effective rate of interest?
A. 10.56%
C. 21.12%
В. 18.96%
D. 22.00%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb12dafa6-0338-4e33-8ce2-fa51ba1d8aff%2F44303e7c-3a3e-4137-9190-b7e218620a9e%2F9cexosp_processed.jpeg&w=3840&q=75)
Transcribed Image Text:10. SM Supermarket purchases P4,562,500 in goods over a 1-year period from its sole supplier. The supplier offers trade
credit under the following terms: 2/15, net 50 days. If Hayes chooses to pay on time but not to take the discount,
what is the average level of the firm's accounts payable, and what is the effective annual cost of its trade credit?
(Assume a 365-day year.)
A. P208,333; 17.81% D. P416,667; 27.43%
B. P416,667; 17.54% E. P625,000; 23.45%
C. P625,000; 17.54%
11. Mr. Jones borrows P2,000 for 90 days and pays P35 interest. What is his effective rate of interest?
A. 7.0%
C. 11.7%
D. none of these
B. 9.3%
12. Ms. Smith borrowed P125,000 at 11% stated rate of interest and was to pay back the loan in 24 monthly
payments. What is her effective rate of interest?
A. 10.56%
C. 21.12%
В. 18.96%
D. 22.00%
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