Newsome inc. buys on terms of 3/15, net 45. It does not take the discount, and it generally pays after 60 days. What is the nominal annual percentage cost of its non-free trade credit, based on a 365-day year?
Q: A firm is offered trade credit terms of 3/15, net 30 days. The firm does not take the discount, and…
A: Trade discount: it is a reduction granted by a supplier forms the list price of goods or services on…
Q: A firm is offered trade credit terms of 3/15, net 30 days. The firm does not take the discount, and…
A: Credit terms of 3/15, net of 30 days, Number of days to repay the loan is 50 days
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: 7. Howes Inc. purchases $4,562,500 in goods per year from its sole supplier on terms of 2/15, net…
A: Financial Management: Financial management comprises of two words i.e. Finance and management.…
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: 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: A firm is offered trade credit terms of 3/15, net 30 days. The firm does not take the discount, and…
A: The effective annual cost of not taking trade cash discount is computed as follows: - Effective…
Q: Hail and Sons operates for 240 days in a year. It has been offered credit terms of 4/30 net 90 days.…
A: If company provide credit than it is cost to company so company provide discount to the customers to…
Q: Company X sells on a 3/10, net 90, basis. Company Y buys goods with an invoice of $2,500. a. How…
A: Calculation of Deduction Amount, Extra Credit Days and Effective Annual Rate: Excel Spreadsheet:…
Q: If a firm is given a trade credit terms of 2/15, net 30, then the cost to the firm failing to take…
A: 1. 2/15, net 30 means if payment is made within 15 days , it will get 2% discount. Otherwise the…
Q: GFB Co. buys on terms of 2/15, net 30 days. It does not take discounts, and it typically pays 30…
A: Free Trade credit refers to a type of financing wherein the buyer gets a credit period of…
Q: What is the nominal annual percentate cost of the non-free trade credit if it pays within 120 days…
A: Nominal annual % cost of non-free trade credit = [ { Discount / ( 1 - Discount ) } x { 365 / ( Days…
Q: Fil Development buys on terms of 2/15, net 60 days. It does not take discounts, and it typically…
A: Accounts payables are the liabilities which arises due to credit purchases from the suppliers. The…
Q: XYZ is evaluating whether to loosen its credit terms from 2/10, net 30 to 3/10, net 30. At present,…
A:
Q: PPG Co. buys on terms of 2/15, net 30 days. It does not take discounts, and it typically pays 30…
A: Credit financing is a type of financing in which a purchase is made on credit, that is, the purchase…
Q: rate per period? The number of compounding period is ___ How many days are there per
A: Number of days per period are as follows:
Q: c. What is the effective annual rate of interest if Y pays on the due date rather than day 15? (Use…
A: Given, Invoice amount=$ 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: Haumea has been offered credit terms of discount of four percent if paid within thirty days, if not…
A: Workings: Nominal annual percentage cost of its non-free trade credit=Discount rate100-Discount…
Q: A company buys on terms of 2/15, net 30 days. It does not take discounts, and it typically pays 35…
A: Nominal Annual Cost = Discount percent(100-Discount percent) × 365 daysTotal Pay period - Discount…
Q: Mavericks Cosmetics buys $4,691,301 of product (net of discounts) on terms of 7/10, net 60, and it…
A: To expand the business or operations, firms required funds which can be raised through issuing…
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: A firm is offered trade credit terms of 3/15, net 30 days. The firm does not take the discount, and…
A: The question is related to cost of trade. The details are given.
Q: Newsome Inc. buys on terms of 3/15, net 45. It does not take the discount, and it generally pays…
A: Nominal annual percentage cost=[Discount rate / (100-Discounting rate ) * [365 /(Total days to pay -…
Q: Big Dom's Pawn Shop charges an interest rate of 25.5 percent per month on loans to its customers.…
A: Solution (A) APR is the interest rate per period times the number of periods in a year APR = 12…
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: Newsome Inc. buys on terms of 4/10, net 45. It does not take the discount, and it generally pays…
A: Effective annual percentage = (1+[Discount rate/(1–Discount Rate)])^n– 1 Where n= No. of days in a…
Q: firm is offered trade credit terms of 3/15, net 45 days. The firm does not take the discount, and it…
A: Cost of not taking Trade Discount = Discount % / (100 - Discount%) × 365/(Total Pay period -…
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: Peanut Inc. is evaluating whether to change its credit terms from 2/10 net 30 to 3/10 net 30. At…
A: Account receivables (AR) is current assets (CA) for the firm. To make effective collections and…
Q: A company is offred trade credit terms of 3/15, net 30 days. If the firm does not take the discount,…
A: The term 2/15, net 30 days means customer will get 3% discount if he pay within 15 days but here…
Q: A firm is offered trade credit terms of 3/15, net 30 days. The firm does not take the discount, and…
A: Discount period = 15 days Total pay period/Days credit outstanding = 50 days Rate per period = 3%…
Q: Radio Shack offers credit to its customers and charges interest of 1.2 percent per month. What is…
A: In the given question we require to calculate the Annual Percentage rate if the per month interest…
Q: 6. 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 gives no cost to the company.
Q: A firm is offered trade credit terms of 3/15, net 30 days. The firm does not take the discount, and…
A: SOLUTION- WORKING- NUMBER OF DAYS ARE THERE PER PERIOD IS 50-15 = 35 DAYS.
Q: nider Industries sells on terms of 2/10, net 25. Total sales for the year are $600,000. Thirty…
A: Days Sales Outstanding means the number of days taken by the firm to collect the payment from their…
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: BayFish Company currently uses maximum trade credit by not taking discounts on its purchases.…
A: If the firm plans to use trade discount. Then firm should borrow notes. $10000 per day borrow. And…
Q: 19. Atlanta Cement, Inc. buys on terms of 2/15, net 30. It does not take discounts, and it typically…
A: Annual percentage rate: The term annual percentage rate (APR) is also known as the nominal annual…
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: Queen Corp sells on terms of 2/10, n/30. 70% of customers normally avail of the discounts. Annual…
A: The calculation of average accounts receivable has been made as follows:
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: 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: 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: Why is some trade credit called free while other credit is called costly? If a firm buys on terms of…
A: Trade credit is a form of debt which is arise from selling goods on credit. It is reflected in…
Trending now
This is a popular solution!
Learn your way
Includes step-by-step video
Step by step
Solved in 2 steps
- Newsome Inc. buys on terms of 4/10, net 45. It does not take the discount, and it generally pays after 55 days. What is the effective (not nominal) annual percentage cost of its non-free trade credit, based on a 365-day year?Atlanta Cement, Inc. buys on terms of 2/15, net 30. It does not take discounts, and it typically pays 65 days after the invoice date. Net purchases amount to $720,000 per year. What is the nominal annual percentage cost of its non-free trade credit, based on a 365-day year? Please explain process and show calculations.A firm buys on terms of 3/15, net 45. It does not take the discount, and it generally pays after 60 days. What is the nominal annual percentage cost of its non-free trade credit, based on a 365-day year? 36.73% 25.09% 33.39% 27.59% 30.35%
- Howes Inc. purchases $4,562,500 in goods per year from its sole supplier on terms of 2/15,net 50. If the firm chooses to pay on time but does not take the discount, what is the effective annual percentage cost of its non-free trade credit? (Assume a 365-day year.)Calla Lily Corp. purchases on terms of 2/8, net 45 days, does not accept discounts, and pays after 58 days. How much does the non-free trade credit cost in terms of effective annual percentage cost? (Incorporate a 365-day year)Howes Inc. purchases $4,562,500 in goods per year from its sole supplier on terms of 2/15, net 50. If the firm chooses to pay on time but does not take the discount, what is the effective annual percentage cost of its non-free trade credit? (Assume a 365-day year.) a. 21.17% b. 23.45% c. 22.28% d. 20.11% e. 24.63%
- Bumpas Enterprises purchases $4,562,500 in goods per year from its sole supplier on terms of 4/10, net 65. If the firm chooses to pay on time but does not take the discount, what is the effective annual percentage cost of its non-free trade credit? (Assume a 365-day year.) a. 21.98% b. 27.65% c. 29.49% d. 31.12% e. 28.46%Howes Inc. buys on terms of 2/15, net 50 days. It does not take discounts, and it typically pays on time, 50 days after the invoice date. Net purchases amount to $450,000 per year. On average, what is the dollar amount of costly trade credit (total credit − free credit) the firm receives during the year? (Assume a 365-day year, and note that purchases are net of discounts.)AL Enterprises purchases P4,562,500 in goods per year from its sole supplier on terms of 2/15, net 50. If the firm chooses to pay on time but does not take the discount, what is the effective annual percentage cost of its nonfree trade credit? (Assume a 365-day year.)20.11%23.45%22.28%21.17%24.63%
- Black Panther Inc. buys on terms of 2/15, net 60 days. It does not take discounts, and it typically pays on time, 60 days after the invoice date. Net purchases amount to P450,000 per year. On average, how much “free” trade credit does the firm receive during the year? (Assume a 365-day year, and note that purchases are net of discounts.)A firm buys on terms of 2/10, net 30, but generally does not pay until 40 days after the invoice date. Its purchases totaled $1,095,000 per year. How much “non-free” trade credit does the firm use on average each year? What is the nominal cost of “non-free” trade credit? What is the effective cost rate of the costly credit?Fil Development buys on terms of 2/15, net 60 days. It does not take discounts, and it typically pays on time, 60 days after the invoice date. Net purchases amount to P550,000 per year. On average, what is the dollar amount of total trade credit (costly + free) the firm receives during the year, i.e., what are its average accounts payable? (Assume a 365-day year, and note that purchases are net of discounts.)P109,895P104,662P 94,932P 99,678P 90,411
