Question
3a) Your firm purchases goods from its supplier on terms of 1/15, net 40. a. What is the effective annual cost to your firm if
3a) Your firm purchases goods from its supplier on terms of 1/15, net 40. a. What is the effective annual cost to your firm if it chooses not to take advantage of the trade discount offered?
3b). What would be the effective annual cost if the firms had terms of 2/15, net 50?
5) Company A takes a $750000 loan at a 8% APR rate with quarterly compounding. If the company takes 10% and puts it in an interest-bearing account. The bank that serve the firm pays 1% APR with quarterly compounding. What is the EAR of firm three-month loan? What will be the effective payment?
6) A Firm issues three-month commercial paper with a $100000 face value and receives $98000. What effective annual rate is the firm paying for its funds?
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