A. DEF has total forecasted gross purchases of P4,500,000 relating to a major supplier for the coming year. The supplier is offering a credit term of 3/15, n/45. How much is the simple annual effective cost of paying on the 45th day? B. ABC can take a 45-day loan with a 15% interest deducted in advance, to be reapplied each time. How much is the simple annual cost of the loan? C. ABC’s bank offered a loan with conditions of a P5,000,000 face amount, 6-month term, 4% interest deducted in advance and bank charge of P30,000. How much is the compounded annual effective cost of the bank loan?
A. DEF has total forecasted gross purchases of P4,500,000 relating to a major supplier for the coming year. The supplier is offering a credit term of 3/15, n/45. How much is the simple annual effective cost of paying on the 45th day? B. ABC can take a 45-day loan with a 15% interest deducted in advance, to be reapplied each time. How much is the simple annual cost of the loan? C. ABC’s bank offered a loan with conditions of a P5,000,000 face amount, 6-month term, 4% interest deducted in advance and bank charge of P30,000. How much is the compounded annual effective cost of the bank loan?
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 19P
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A. DEF has total
- How much is the simple annual effective cost of paying on the 45th day?
B. ABC can take a 45-day loan with a 15% interest deducted in advance, to be reapplied each time.
- How much is the simple annual cost of the loan?
C. ABC’s bank offered a loan with conditions of a P5,000,000 face amount, 6-month term, 4% interest deducted in advance and bank charge of P30,000.
- How much is the compounded annual effective cost of the bank loan?
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