Evaluate the annual rate of return for cash discounts

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Reference no: EM1312287

Compute the annual rate of return for the cash Discounts

Cash discounts ROI

Calculate the appropriate annual rate of return on investment of the following cash discount terms

1. What is the annual rate of return on investment? Use 360 day year in your calculation (use decimal points)

2. What is the annual rate of return on investment? Use 360 day period

3. Which of the terms 1-3 part a is not likely to be significant incentive to customers to pay promptly

(a)1/15, net 30

(b)2/10, net 60

Reference no: EM1312287

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