What is the effective annual cost of credit terms of 1/15, net 40 if the firm stretches

Question:

What is the effective annual cost of credit terms of 1/15, net 40 if the firm stretches the accounts payable to 60 days?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Fundamentals Of Corporate Finance

ISBN: 9781292437156

5th Global Edition

Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford

See More Books

Question Posted: Feb 21, 2024 10:00 AM

See More Questions

Rich Jackson, a recent finance graduate, is planning to go into the wholesale building supply business with his brother, Jim, who majored in building construction. The firm would sell primarily to...
26. With its current leverage, Impi Corporation will have net income next year of 4.5 million. If Impis corporate tax rate is 35% and pay 8% interest on its debt, how much additional debt can Impi...
Ques 1: What is the major complaint by firms concerning the Sarbanes-Oxley act of 2012? A. the legislative maximum allowable compensation for a CEO. B. the legal requirement to disclose project...
Inscribe a detailed paper on RFID Solutions and Standards in the Transportation Industry.
Find (a) (f + g) (x), (b) (f - g) (x), (c) ( fg)(x), (d) (f/g)(x). What is the domain of f/g? 1. f (x) = x2 + 3, g(x) = 2x 1 2. f (x) = x2 4, g(x) = 3 x
Required information [The following information applies to the questions displayed below) Adger Corporation is a service company that measures its output based on the number of customers served. The...
Oil Changes A repair shop believes that people travel more than 3500 miles between oil changes. A random sample of 8 cars getting an oil change has a mean distance of 3375 miles since having an oil...
Kitchenware, Inc., sells two types of water pitchers, plastic and glass. Plastic pitchers cost the company$15 and are sold for $30. Glass pitchers cost $24 and are sold for $45. All other costs are...
The goal is to apply concepts learned to a specific marketing situation. Projects are be done individually. The objective is to design a consumer research analysis through gaining insights into...
How does working capital impact a firms value?
The Rowd Company has an average accounts payable balance of $250,000. Its average daily cost of goods sold is $14,000, and it receives terms of 2/15, net 40 from its suppliers. Rowd chooses to forgo...
Here is the ledger for Kriscoe Co. Instructions (a) Reproduce the journal entries for only the transactions that occurred on October 1, 10, and 20, and provide explanations for each. (b) Prepare a...
You have been employed as a systems analyst in the information systems organization of a medium-sized consumer goods manufacturer for three years. You are quite surprised when your manager offers you...
For your initial post, address the following: First, introduce yourself to the class by sharing a bit about yourself, such as your preferred name or pronouns, where you are from, what your major is,...
Question 8 : Consider the technology of Solar Panels. Which stage of the technology life cycle S curve is this technology in. Justify why ? Question 9 : The standard Product Life Cycle has 5 stages...
At Benihana restaurant a man wrenched his neck while ducking a piece of flying shrimp, requiring treatment by several doctors. By that summer, doctors determined surgery was necessary to treat...
You have just come into an inheritance of $25,000 from a distant relative, and you want to invest it for the long term. Provide an investment portfolio that includes five different stocks. Report the...
Which combinations of compounds can make a buffer? Assume aqueous solutions. a. HCl and NaCl b. HNO2 and NaNO2 c. NH4NO3 and HNO3 d. NH4NO3 and NH3
Chicago Company sold merchandise to a customer for $1,500 cash in a state with a 6% sales tax rate. The total amount of cash collected from the customer was $558. $600. $642. $636. Nevada Company...
See Table 2.5 showing financial statement data and stock price data for Mydeco Corp.Suppose Mydecos costs and expenses had been the same fraction of revenues in 20162019 as they were in 2015.What...
See Table 2.5 showing financial statement data and stock price data for Mydeco Corp. Suppose Mydeco had purchased additional equipment for $12 million at the end of 2016, and this equipment was...
See Table 2.5 showing financial statement data and stock price data for Mydeco Corp. Suppose Mydeco repurchases 2 million shares each year from 20162019. What would its earnings per share be in 2019?...
Yard Professionals Incorporated experienced the following events in Year 1, its first year of operation: Performed services for $31,000 cash. Purchased $7,800 of supplies on account. A physical count...
This question is from case # 24 of book Gapenski's Cases in Healthcare Finance, Sixth Edition Select five financial and five operating Key Performance Indicators (KPIs) to be presented at future...
assume that we have only two following risk assets (stock 1&2) in the market. stock 1 - E(r) = 20%, std 20% stock 2- E(r) = 10%, std 20% the correlation coefficient between stock 1 and 2 is 0. and...

What is the effective annual cost of credit terms of 1/15, net 40 if the firm stretches

Question:

Step by Step Answer:

PLAN First we need to compute the interest rate per period The 1 discount means that on a 100 purc...View the full answer

Fundamentals Of Corporate Finance

Students also viewed these Business questions