Company X sells on a 2/10, net 90, basis. Company Y buys goods with an invoice of $1,500. a. How much can company Y deduct from the bill if it pays on day 10? (Do not round intermediate calculations. b How many extra days of credit can company Y receive if it passes up the cash discount? c What is the effective annual rate of interest if Y pays on the due date rather than day 10? (Use 365 days in a year. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Company X sells on a 2/10, net 90, basis. Company Y buys goods with an invoice of $1,500. a. How much can company Y deduct from the bill if it pays on day 10? (Do not round intermediate calculations. b How many extra days of credit can company Y receive if it passes up the cash discount? c What is the effective annual rate of interest if Y pays on the due date rather than day 10? (Use 365 days in a year. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 3STP
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Company X sells on a 2/10, net 90, basis. Company Y buys goods with an invoice of $1,500.
a. How much can company Y deduct from the bill if it pays on day 10? (Do not round intermediate calculations.
b How many extra days of credit can company Y receive if it passes up the cash discount?
c What is the effective annual rate of interest if Y pays on the due date rather than day 10? (Use 365 days in a year. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
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