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Calculate how much the buyer saved by following strategy

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Reference no: EM133173537

Question - On May 11, 2020, Wilson Purchasing purchased $28,000 of merchandise from Happy Sales; terms 3/10, n/90, FOB Happy Sales. The cost of the goods to Happy was $23,000. Wilson paid $1,800 to Express Shipping Service for the delivery charges on the merchandise on May 11. On May 12, Wilson returned $4,600 of goods to Happy Sales, which restored them to inventory. The returned goods had cost Happy $3,800. On May 20, Wilson mailed a cheque to Happy for the amount owed on that date. Happy received and recorded the cheque on May 21.

Analysis Component: Assume that the buyer, Wilson Purchasing, borrowed enough cash to pay the balance on the last day of the discount period at an annual interest rate of 4% and paid it back on the last day of the credit period. Calculate how much the buyer saved by following this strategy.

Reference no: EM133173537

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