Suppose a firm makes purchases of $3.65 million per year under terms of 2/10, net 30, and takes discounts. a. What is the average amount of accounts payable net of discounts? (Assume the $3.65 million of purchases is net of discounts-that is, gross purchases are $3,724,489.80, discounts are $74,489.80, and net purchases are $3.65 million.) b. Is there a cost of the trade credit the firm uses? c. If the firm did not take discounts but did pay on the due date, what would be its average pavables and the cost of this nonfree trade credit?

Suppose a firm makes purchases of $3.65 million per year under terms of 2/10, net 30, and takes discounts. a. What is the average amount of accounts payable net of discounts? (Assume the $3.65 million of purchases is net of discounts-that is, gross purchases are $3,724,489.80, discounts are $74,489.80, and net purchases are $3.65 million.) b. Is there a cost of the trade credit the firm uses? c. If the firm did not take discounts but did pay on the due date, what would be its average pavables and the cost of this nonfree trade credit?

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Description: Would you only answer the last question please Thank you ! (16-15)Cash DiscountsSuppose a firm makes purchases of $3.65 million per year under terms of 2/10, net 30, andtakes discounts.a. What is the average amount of accounts payable net of discount

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 15P: Suppose a firm makes purchases of $3.65 million per year under terms of 2/10, net 30, and takes...

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