Compsny X sells on a 1/15, net 90, basis. Company Y buys goods with an invoice of $3,000. Discount= $30 Number of days= 75 C.) What is the effective annual rate of interest if Y pays on the due date rather than day 15? (Use 365 days in a year. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Step 1 Financial instruments are assets that can be traded, or contractual; agreement between…

Q: A store will give you a 4.00% discount on the cost of your purchase if you pay cash today.…

A: Given information : Discount rate = 4% Time period for payment due = 1 month  Purchase price…

Q: FP Co. buys on terms 2/10, net 30, but generally does not pay until the 40 days after invoice date.…

A: Given Information: Total purchases         P2,160,000 Buying terms 2/10, net 30

Q: Your company has been offered credit terms on its purchases of 4/30, net 90 days. What will be the…

A: Trade credit is the arrangement by which the customer gets additional time to repay the dues and…

Q: A store will give you a 4.50% discount on the cost of your purchase if you pay cash today.…

A: The implicit rate of borrowing is the cost paid in the terms of discount by the customer if the…

Q: On average, how much “free” trade credit does the firm receive during the year?

A: Free trade credit refers to the payment made by a firm within the discount period whereas when the…

Q: Percentages need to be entered in decimal format, for instance 3% would be entered as .03.)…

A: Calculation with proper explanation given in next sheet.

Q: Friendly's Quick Loans, Inc., offers you $8.25 today but you must repay $10.45 when you get your…

A: Given: Particulars Amount Present value $8.25 Future value $10.45

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Interest rate= Prime rate +4% = 8% + 4%= 12% Interest is calculated for the number of days on…

Q: Company X sells on a 3/10, net 90, basis. Company Y buys goods with an invoice of $2,500. a. How…

A: Calculation of Deduction Amount, Extra Credit Days and Effective Annual Rate: Excel Spreadsheet:…

Q: GFB Co. buys on terms of 2/15, net 30 days. It does not take discounts, and it typically pays 30…

A: Free Trade credit refers to a type of financing wherein the buyer gets a credit period of…

Q: A car dealer carries out the following calculations. What is the annual percentage rate?   Lis…

A: As per the given information: Amount to be financed - $4,691.03 Interest rate - 10% Months of…

Q: Fil Development buys on terms of 2/15, net 60 days. It does not take discounts, and it typically…

A: Accounts payables are the liabilities which arises due to credit purchases from the suppliers. The…

Q: Company X sells on a 2/10, net 90, basis. Company Y buys goods with an invoice of $1,500.   a. How…

A: Given values: Invoice value = $ 1500 if paid within 10 days discount = 2% with in 90 days it should…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Prime rate The current interest rate charged by the financial institution to its customers is known…

Q: PPG Co. buys on terms of 2/15, net 30 days. It does not take discounts, and it typically pays 30…

A: Credit financing is a type of financing in which a purchase is made on credit, that is, the purchase…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: the line of credit is a pre-approved limit offered by financial institutions, banks, etc, you can…

Q: c. What is the effective annual rate of interest if Y pays on the due date rather than day 15? (Use…

A: Given, Invoice amount=$ 1,500 1/15, net 60, basis which means if company y pays within 15 days then…

Q: HBC Inc. buys on terms of 2/10, net 30 days. It does not take discounts, and it typically pays 30…

A: The question is related to the Free trade Credit. The details are given.  First we will calculate…

Q: A car dealer carries out the following calculations.What is the annual percentage rate?   List…

A: The APR is 19.59%.

Q: A firm sells its accounts receivables to a factor at a 3.5% discount. The average collection period…

A: Average collection period = 3 months Discount = 3.5% Receivables Turnover = 12months / Average…

Q: Mavericks Cosmetics buys $4,691,301 of product (net of discounts) on terms of 7/10, net 60, and it…

A: Effective percentage cost of trade credit considers the compounding effect. Following is the formula…

Q: Percentages need to be entered in decimal format, for instance 3% would be entered as .03. Cooley…

A: Factoring of  accounts receivable: In general business, accounts receivable are sold out to another…

Q: Robinson's, an electrical supply company, sold $3,800 of equipment to Jim Coates Wiring, Inc. Coates…

A: Promissory Note is issued for the purpose of holding some capital for the certain period of time. It…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Interest rate applicable = Prime rate + premium Interest will be charge when the line of credit…

Q: Howes Inc. buys on terms of 2/15, net 50 days. It does not take discounts, and it typically pays on…

A: Costly Trade credit= Total credit - free trade credit Purchase daily = Total purchase / number of…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Line-of-Credit refers to a set limit up-to which investor can borrow funds and interest is only…

Q: AL Enterprises purchases P4,562,500 in goods per year from its sole supplier on terms of 2/15, net…

A: Discount rate = 0.02 (i.e. 2%) Allowed payment days = 50 Discount days = 15

Q: Kirk Development buys on terms of 2/15, net 60 days.  It does not take discounts, and it typically…

A: The calculation is:

Q: Otto Company borrows money on January 1 and promises to pay it back in four semiannual payments of…

A: Introduction: The concept of present value implies that money today is worth more than money…

Q: Newsome inc. buys on terms of 3/15, net 45. It does not take the discount, and it generally pays…

A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

Q: An entity sells goods for ₱150,000 to a customer who was granted a special credit period of 1 year.…

A: The initial measurement of the receivable is represented by the nominal value of the receivable net…

Q: Hinkle Corporation buys on terms of 2/15, net 60 days. It does not take discounts, and it typically…

A: The process by which financial transactions of the business are recorded and communicated with the…

Q: nider Industries sells on terms of 2/10, net 35. Total sales for the year are $600,000. Thirty…

A: Days sales outstanding means the average number of days , a customer take , to make payment. This…

Q: Black Panther Inc. buys on terms of 2/15, net 60 days. It does not take discounts, and it typically…

A: Net purchases = P450,000 Terms of credit = 2/15,net 60 days

Q: Fil Development buys on terms of 2/15, net 60 days. It does not take discounts, and it typically…

A: Accounts payable: Accounts payable are the liabilities which arises due to credit purchases from the…

Q: McEwan Industries sells on terms of 3/10, net 20. Total sales for the year are $971,000; 40% of the…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Williams Electronics sold some computers for $6,500 and established a promissory note requiring…

A: The deposits’ or payments’ present value is the discounted value of the future value at interest…

Q: FP Co. buys on terms 2/10, net 30, but generally does not pay until the 40 days after invoice date.…

A: Trade credit means purchasing of trade goods on credit basis. If there is any discount period, then…

Q: The major supplier of SS Corp. offers credit terms of 2/10, n/35. What is the net benefit (in rate…

A: Here Credit terms 2/10, n/35 means SS Corp will get 2% discount if SS Pays within 10 days Here we…

Q: HBC Inc. buys on terms of 2/10, net 30 days. It does not take discounts, and it typically pays 30…

A: Trade Discount: Providing a trade discount is a good approach to capture a customer's attention by…

Q: Calla Lily Corp. purchases on terms of 2/8, net 45 days, does not accept discounts, and pays after…

A: Time = 45 days Terms = 2/8 Pay after A = 58 days Year y = 365 days

Q: Robinson’s, an electrical supply company, sold $4,800 of equipment to Jim Coates Wiring, Inc. Coates…

A: Promissory note is a mode of payment through which one party make promise to pay a certain amount of…

Q: Black Panther Inc. buys on terms of 2/15, net 60 days. It does not take discounts, and it typically…

A: Credit terms indicate the percentage discount a firm can take off the invoice amount if payments…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Loan is a value which is borrowed from the sources like bank and amount repaid later with and extra…

Q: Ammer Products has an average accounts payable balance of P850,000 and its annual net credit…

A: Accounts payable in the business means accounts of those suppliers from whom business has made…

Q: Otto Company borrows money on January 1 and promises to pay it back in four semiannual payments of…

A: The question is based on the concept of Financial Management.

Q: Bulldogs Inc. is given terms of 2/10, net 45 by its suppliers. If Bulldogs Inc. forgoes the cash…

A: Cash discount if paid within 10 days= 2%

Q: Company X sells on a 2/15, net 90, basis. Company Y buys goods with an invoice of $1,000.   a. How…

A: Credit sale term =2/15, net 90 Company Y buys goods of =$1000 Meaning of 2/15, net 90: It means if…

Q: cool security systems has $37,500 line of credit , which charges an annual percentage rate of prime…

A: The closing balance can be calculated as follows :