Answered: A retailer ordered merchandise totaling…

A retailer ordered merchandise totaling $128,115.23 with terms 3.5%/10 net 40. What is the effective rate of return? Assume there are 365 days in a year.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter7: Analysis Of Financial Statements

Section: Chapter Questions

Problem 1P: Greene Sisters has a DSO of 20 days. The companys average daily sales are 20,000. What is the level...

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Question

A retailer ordered merchandise totaling $128,115.23 with terms 3.5%/10 net 40. What is the effective rate of return? Assume there are 365 days in a year.

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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