Millbridge earns four percent on its idle cash

Assignment Help Financial Management

Reference no: EM13976153

Millbridge Hospital buys its supplies in bulk and has recently switched vendors. The first purchase Millbridge made was for 500 boxes of gauze at $3.46 a box. The purchase had payment terms of 2/15 N/30. Millbridge earns four percent on its idle cash. Should it take the discount or not? Justify your answer by showing calculations.

Reference no: EM13976153

Questions Cloud

What is the expected capital gain or loss on the bond : You purchase a 7% annual coupon bond with a 10% yield to maturity (YTM), and a 10 year life. What is the expected capital gain or loss on the bond (as a percent) in the first year?

Relationship between current assets and current liabilities : Current ratio = current assets/current liabilities. Quick ratio= (cash and cash equivalent +net receivables)/ current liabilities. Liquidity ratio is the ratio, which sets relationship between current assets and current liabilities. It denotes excess..

Securitys price sensitivity to an interest rate change : The greater a security's coupon, the lower the security's price sensitivity to an interest rate change, ceteris paribus.

Prepare accounts-receivable aging schedule by total dollars : Millbridge Hospital receives earned income from several sources: Medicare, Medicaid, private insurance, and selfpay customers. The federal government owes the hospital $7 million, 60% is current, 30% is between 31 and 61 days old, and the remaining 1..

Millbridge earns four percent on its idle cash : Millbridge Hospital buys its supplies in bulk and has recently switched vendors. The first purchase Millbridge made was for 500 boxes of gauze at $3.46 a box. The purchase had payment terms of 2/15 N/30. Millbridge earns four percent on its idle cash..

Determine the rate of return of the additional investment : Two alternative investment proposals are under consideration for a vacant owner by Urban Development Corporation. Plan A would require an immediate investment of $120,000 and first-year expenditure for property taxes, maintenance, and insurance of $4..

Proposed system exchange in retail stores and headquarters : You were hired as an analyst to develop a new information system to automate the sales transactions and manage inventory for each retail store in a large Automobile-Parts chain. What information should the proposed system exchange between the retail ..

Meals for the homeless has many sources of income : Meals for the Homeless has many sources of income, but they pay Meals very differently. Specifically, Meals has contracts with the city, county, and state to provide food services. In addition, Meals has contracted with a private foundation to augmen..

Usually experiences seasonality in its cash balances : Meals for the Homeless usually experiences seasonality in its cash balances. In December, contributions from donors increase its cash balances, and then these balances are used throughout the following year. By the fall, Meals for the Homeless has a ..

User Account

All Pages