Compute how much the buyer saved by following this strategy

Reference no: EM13579769

Santa Fe Company purchased merchandise for resale from Mesa Company with an invoice price of $24,000 and credit terms of 3/10, n/60. The merchandise had cost Mesa $16,000. Santa Fe paid within the discount period. Assume that both buyer and seller use a perpetual inventory system.

Assume that the buyer borrowed enough cash to pay the balance on the last day of the discount period at an annual interest rate of 8% and paid it back on the last day of the credit period. Compute how much the buyer saved by following this strategy. (Round your final answer to the nearest whole dollar amount. Use 365 days a year.)

Savings from discount taken = ?

Interest expense on funds borrowed:

Amount borrowed = $23280

Number of days of interest = ?

Interest expense = ?

Buyer's net savings = ?

Reference no: EM13579769

Questions Cloud

Break even cvp potential cost structure change employee : break even cvp potential cost structure change employee reaction ersatz manufactures a single product. what is ersatz

College calendars imprints calendars with college names the : college calendars imprints calendars with college names. the company has fixed expenses of 1115000 each month plus

Suppose it is known that 10 of people who play poker : suppose it is known that 10 of people who play poker machines have a gambling problem. suppose it is also known that 20

Estimate cost function what is the breakeven point in cases : estimate cost function? what is the breakeven point in cases for oysters away? the manager thinks that the copany will

Compute how much the buyer saved by following this strategy : santa fe company purchased merchandise for resale from mesa company with an invoice price of 24000 and credit terms of

The australian newspaper is read by 70 of coalition voters : suppose it is known that 45 of the population are coalition voters 45 are alp voters and 10 vote for greens. suppose it

If one person is selected at random from the group what is : of the 89 people who answered yes to a question 8 were male. of the 43 people who answered no to the question 5 were

Paulson company uses a predetermined overhead rate based on : paulson company uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs.the

Prepare a comparative balance sheet for 2014 and 2013 : balance sheet data for hanes company on december 31 the end of the fiscal year are shown below.20142013current

User Account

All Pages