Principles of Managerial Finance (14th Edition) (Pearson Series in Finance)
14th Edition
ISBN: 9780133508079
Author: Gitman
Publisher: PEARSON
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Question
Chapter 16, Problem 16.3P
a)
Summary Introduction
To discuss: The shorthand expression of the credit term.
Introduction:
Credit term refers to customer’s ability to acquire goods before making payment, depends on the trust that payment will be paid in future.
b)
Summary Introduction
To determine: The number of days until full payment is due for invoice dated March 12th.
c)
Summary Introduction
To determine: The cost of giving up the early payment discount.
d)
Summary Introduction
To discuss: The Person X suggestion on taking the discount or giving up the early payment discount when the cost of short-term financing is 8%.
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The credit card with the transactions described in the popup below uses the average daily balance method to calculate interest. The monthly interest rate is 1.2% of the average daily balance. Calculate parts a-d using the statement below.
transaction description
transaction amount
Previous balance, $2654.19
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June 6 Payment
$1100.00 credit
June 8 Charge: gas
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June 9 Charge: groceries
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June 17 charge: gas
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charge: groceries
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June 27 charge: clothing
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June 30 end of billing period
Payment due date: July 9
A) Find the average daily balance for the billing period. Round to the nearest cent.
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C) Find the balance due on July 1.
(Use the answer from part b to find this answer.)
D) This credit card…
The activity in the credit card account of Mara for one billing period shows the following transactions: November 18 purchase of P 4,500.00; November 25 purchase of P23,000.00; December 3 payment of P30,000.00 and December 10 purchase of P8,430.00. (1.) Find the average daily balance on the next billing date of December 15 if the previous balance was P 5,900.00 due on November 15. Given the finance charge of 2.25% on the daily balance. (b) Find the finance charge and the balance owned on December 15.
The AST Enterprise is currently selling stocks at P 2, 300.00 and with a dividend of P150. What is the current yield of stocks.
The entry to record the receipt of payment within the discount period on a sale of $2400 with terms of 2/8, n/30 will include a
ANSWER: credit to accounts receivable for $2400
Explain why this is the answer
Chapter 16 Solutions
Principles of Managerial Finance (14th Edition) (Pearson Series in Finance)
Ch. 16.1 - Prob. 1FOECh. 16.1 - What are the two major sources of spontaneous...Ch. 16.1 - Prob. 16.2RQCh. 16.1 - Prob. 16.3RQCh. 16.2 - Prob. 1FOPCh. 16.2 - How is the prime rate of interest relevant to the...Ch. 16.2 - How does the effective annual rate differ between...Ch. 16.2 - What are the basic terms and characteristics of a...Ch. 16.2 - What is a line of credit? Describe each of the...Ch. 16.2 - What is a revolving credit agreement? How does...
Ch. 16.2 - Prob. 16.9RQCh. 16.2 - Prob. 16.10RQCh. 16.3 - Are secured short-term loans viewed as more risky...Ch. 16.3 - In general, what interest rates and fees are...Ch. 16.3 - Describe and compare the basic features of the...Ch. 16.3 - For the following methods of using inventory as...Ch. 16 - Prob. 1ORCh. 16 - Prob. 16.1STPCh. 16 - Prob. 16.1WUECh. 16 - Prob. 16.2WUECh. 16 - Prob. 16.3WUECh. 16 - Prob. 16.4WUECh. 16 - Horizon Telecom sold 300,000 worth of 120-day...Ch. 16 - Prob. 16.1PCh. 16 - Prob. 16.2PCh. 16 - Prob. 16.3PCh. 16 - Learning Goal 1 P16-4 Early payment discount...Ch. 16 - Prob. 16.5PCh. 16 - Prob. 16.6PCh. 16 - Prob. 16.7PCh. 16 - Prob. 16.8PCh. 16 - Prob. 16.9PCh. 16 - Unsecured sources of short-term loans John Savage...Ch. 16 - Learning Goal 3 P16-11 Effective annual rate A...Ch. 16 - Prob. 16.12PCh. 16 - Compensating balance versus discount loan Weathers...Ch. 16 - Prob. 16.14PCh. 16 - Cost of commercial paper Commercial paper is...Ch. 16 - Prob. 16.16PCh. 16 - Prob. 16.17PCh. 16 - Prob. 16.18PCh. 16 - Prob. 16.19PCh. 16 - Inventory financing Raymond Manufacturing faces a...Ch. 16 - ETHICS PROBLEM Rancco Inc. reported total sales of...
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