Compute the cost of not taking the following cash discounts. Note: Use a 360-day year. Do not round intermediate calculations. Input your final answers as a percent rounded to 2 decimal places. a. 2/17, net 55 b. 2/15, net 55 c. 3/14, net 30 d. 4/13, net 190 Cost of Lost Discount 19.33 % 18.37 % % 8.47 %
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- Simmons Corporation can borrow from its bank at 21 percent to take a cash discount. The terms of the cash discount are 2.5/14, net 50. Compute the cost of not taking the cash discount. Note: Use a 360-day year. Do not round intermediate calculations. Input your final answer as a percent rounded to 2 decimal places.What is the approximate annual cost of foregoing the cash discount if the credit term is 2/15, net 40 and the company pays end of 50 days? Use 360 days a year. Group of answer choices 28.80 percent 29.39 percent 20.57 percent 20.99 percentWhat’s the equivalent interest rate to the terms 3/20, n/60? In other words, what is the effective annual rate that is "given" to a customer for this cash discount? (Use 365 days.) HINT: Use the I = P x R x T formula where R = I/PT and choose some value for the gross amount of the invoice (i.e $1,000). Label (%) and round to the nearest whole percent.
- Compute the present value of $1,000 paid in three years using the following discount rates: 6 percent in the first year, 7 percent in the second year, and 8 percent in the third year. (Do not round intermediate calculations. Round your answer to 2 decimal places.)A company is offering a 4.9% discount to receivables if they agree topay within 45 days. The current receivables days figure is 72.Receivables are financed using an overdraft costing 21%Required:-Calculate the effective annual cost of offering the discount and statewhether it should be offered.A firm offers terms of 2/20, net 50. a. What effective annual interest rate does the firm earn when a customer does not take the discount? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What effective annual interest rate does the firm earn if the discount is changed to 3 percent? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. What effective annual interest rate does the firm earn if the credit period is increased to 70 days? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) d. What effective annual interest rate does the firm earn if the discount period is increased to 25 days? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
- a seller has offered credit terms of 2.5/5 net 50 to a customer that has agreed to immediately purchase 500 units at a sales price per unit of $100. variable costs are $65 per unit and involve an immediate cash outflow. the seller has an annual opportunity cost rate of 7.3%. based on this information, what is the present value of the net flows associated with the cash discount terms? is it - 16,201; 26,750; 81,201; 32,500If the cash discount terms for a $500 purchase are 4/10 net 30, the number 10 refers to Multiple Choice the percentage increase in price if the bill is not paid within 10 days. the number of days for which the discount is valid. the penalty in dollars if the bill is not paid within 10 days. the percentage discounted if the bill is paid within 30 days. the discount in dollars per unit if the order is paid on time within 30 days.The Branson Corporation is considering a change in its cash-only policy. The new terms would be net one period. The required return is 2.5 percent per period. Current Policy New Policy Price per unit $ 85 $ 87 Cost per unit $ 45 $ 45 Unit sales per month 4,250 ? What is the break-even quantity for the new credit policy? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
- The appropriate discount rate for the following cash flows is 7.83 percent per year. Year Cash Flow 1 $ 2,570 2 0 3 4,010 4 2,260 What is the present value of the cash flows? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)Assume the appropriate discount rate for the following cash flows is 10.2 percent. Year Cash Flow 1 $2,100 2 2,000 3 1,700 4 1,500 What is the present value of the cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)The appropriate discount rate for the following cash flows is 6.98 percent per year. Year Cash Flow 1 $ 2,400 2 0 3 3,840 4 2,090 What is the present value of the cash flows? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.) Present Value