If the firm did not take discounts but it did pay on the

Assignment Help Finance Basics
Reference no: EM13483401

Suppose a firm makes purchases of $3.65 million per year under terms of 2/10, net 30, and takes discounts.

a. What is the average amount of accounts payable net of discounts? (Assume that the $3.65 million of purchases is net of discounts-that is, gross purchases are $3,724,490, discounts are $74,490, and net purchases are $3.65 million.)

b. Is there a cost of the trade credit the firm uses?

c. If the firm did not take discounts but it did pay on the due date, what would be its average payables and the cost of this non free trade credit?

d. What would its cost of not taking discounts be if it could stretch its payments to 40 days?

Reference no: EM13483401

Questions Cloud

Formula hint the equation that relates levered and : jupiter incorporated is interested in acquiring mercury limited a privately held firm whose owner desires to retire.
Three rivers dental associates trda is a large dental : three rivers dental associates trda is a large dental practice in pittsburgh. the firms controller is preparing the
Determine the beta of a portfolio consisting of equal : determine the beta of a portfolio consisting of equal investments security beta a t amp t .90 bank of america 1.10
Trail guides inc is currently evaluating two mutually : trail guides inc. is currently evaluating two mutually exclusive investment. after doing a scenario analysis and
If the firm did not take discounts but it did pay on the : suppose a firm makes purchases of 3.65 million per year under terms of 210 net 30 and takes discounts.a. what is the
Which of the following is a question or questions asked : which of the following is a question or questions asked when assessing task performance and group maintenance
Prepare schedules for 1 expected collections from customers : colter company prepares monthly cash budgets. relevant data from operating budgets for 2014
If inez is in the 35 bracket how much income tax results : during the year inez had following transactions involving capital gains gain on the sale of unimproved land purchased 2
Today is your birthday and you are now 37 you are planning : today is your birthday and you are now 37 you are planning your retirement and have decided that you can save 8000.00

Reviews

Write a Review

Finance Basics Questions & Answers

  How do sinking funds reduce default risk what is a stock

answer the two questions with a minimum of 20 words per question1 how do sinking funds reduce default risk?2 what is a

  If the company uses debt its investment banker suggests the

acme corp is a publicly traded firm listed on the nasdaq. its current common stock price is 10 dollars per share. the

  Finance based objective problems

How should a "gain" from the sale of treasury stock be reflected when applying the cost method of recording treasury stock transactions?

  Calculating sustainable growth rate

You've collected the following information about Odyssey, Inc.:

  Computing gross profit of the project

Must you project that firm gross profit will rise next year? If you project that gross profit will rise is the increase a result of volume growth price growth or both?

  Businesses work to compliment or substitute

Marc has opened a twenty-four hour fitness center in a fast growing city. Before buying the franchise and starting his new business, Marc looked at the one other fitness center currently operating in that area.

  In this assignment to be completed individually the

overview planning for retirementin this assignment to be completed individually the objective is to make plans for

  Assume you have been hired as a training consultant by a

assume you have been hired as a training consultant by a medium sized technology company. your client company has asked

  What would the net annual savings be

What is the NPV of accepting the lockbox agreement?

  Calculate the npv and irr without mitigation

Calculate the NPV and IRR without mitigation. Round your answers to two decimal places. Enter your answer for NPV in millions. For example, an answer of $10,550,000 should be entered as 10.55. NPV $ million IRR %

  Calculate charge for the treatment

The company has invented a cure for Aids and is protected by patent. The cost for the one time injection that cures the disease is $100 and includes amortization of the development expenses.

  What is the default risk premium on the corporate bond

A treasury bond that matures in 10 years has a yeild of 6%. A 10 year corporate bond has a yeild of 9%. Assume that the liquidity premium on the corporate bond is 0.5%. What is the default risk premium on the corporate bond?

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!

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