Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

4. Alice's see-end initiative caJls for Fresh n fruity to obtatn a bank loan rate sufcient size t1} enable the company to lake all suppliers'

image text in transcribed
4. Alice's see-end initiative caJls for Fresh n fruity to obtatn a bank loan rate sufcient size t1} enable the company to lake all suppliers' diaeounts. What is the minimum size ot'this loan? [Hit-e.- To take at] suppliers' disttottnts+ the average payment pelied must he 1D days, and net purchases will be pureheses [Purchases ona Figure l :t .132]. Assume that at] this happens, and selve the following tel-owls for the n-et'tr accounts payable balance, using: Accounts payable = Average payment period :t Purchase per stay" *Baeed on net ptntltsesb. New campre the amounts payable you just solved 1.tritlt the nevtr aeeotmts payable balance you found in question 3. The difference is the size of the loan that is required. 5. Assume that Fresh &Fmit}' does ohtain an E pereent loan for one year in the amount you solved in question 51, and it redness its accounts payable balance. aeeordingly. Now the company is taking 2 pereent discounts on all purchases and paying it pereent a year on the loan halttnoe. 1tit'hat is the net gain 'tnn taking the discounts and paying the interest on a beforetar. basis? Ctn an aerlan basis

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Elementary Statisitcs

Authors: Barry Monk

2nd edition

1259345297, 978-0077836351, 77836359, 978-1259295911, 1259295915, 978-1259292484, 1259292487, 978-1259345296

More Books

Students also viewed these Mathematics questions