User Account

All Pages

Calculate the cost of not taking a cash discount

Assignment Help Finance Basics
Reference no: EM132396745

The Reynolds Company buys from its suppliers on terms of 2/10, net 40. Reynolds has not been utilizing the discount offered and has been taking 55 days to pay its bills. The suppliers seem to accept this payment pattern, and Reynold's credit rating has not been hurt.

Mr. Duke, Reynolds Company's vice-president, has suggested that the company begin to take the discount offered. Mr. Duke proposes the company borrow from its bank at a stated rate of 14 percent. The bank requires a 20 percent compensating balance on these loans. Current account balances would not be available to meet any of this required compensating balance.

  1. Calculate the cost of not taking a cash discount
  2. Calculate the annual rate of interest if the company borrow from the bank.
  3. Do you agree with Mr. Duke's proposal

Reference no: EM132396745

Questions Cloud

Zero-bound on short-term interest rates : The zero-bound on short-term interest rates is not a problem, since the central bank can just use quantitative easing to lower intermediate and longer-term
How many years do these bonds have left until they mature : How many years do these bonds have left until they mature? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
What type of life insurance : What type of Life insurance (such as term, whole life, variable, etc.) would you recommend for each of these clients and why?
What population does the disease impact the most : Please discuss "Chagas disease". What population does the disease impact the most and why? Discuss a proposed intervention.
Calculate the cost of not taking a cash discount : Calculate the cost of not taking a cash discount. Calculate the annual rate of interest if the company borrow from the bank.
Describe the type of risk management plan : Summary of the type of risk management plan you selected (new employee, specific audience, community-focused, etc.) and your rationale for selecting.
What is the maximum level of accounts receivable : What is the maximum level of accounts receivable that ALei can carry and have a 35?-day average collection? period? Round to one decimal? place
Create a mini-monograph for chlorthalidone drug : Monographs can be quite in-depth, so your assignment this semester is to familiarize yourself with one (1) drug from each unit.
Spreadsheet for planning personal budget for yourself : You will create an Excel spreadsheet for planning a personal budget for yourself.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd