Another sheer of paper. 1. GMC, Inc. buys PI,000,000 of inventory every day for a month from a supplier that offers the company credit of 2/10,n/30.GMC, Inc. has a cash flow problem, so it delays payments until the end of 30 days. What is the total amount of short-term financing required by GMC, Inc.? Answer: unused balance. If Spartacus did not use the P15,000,000 line in the first year, how much will it pay the bank for short-term financing? Answer: 3. Geronimo buys on terms of 2/10, net 60 days. It does not take discounts, and it typically pays on time, 60 days after the invoice date. Net purchases amount to P900,000 per year. Assume a 360 -day year. a. Average accounts payable b. Free Trade credit(in amount). c. Costly trade credit (in amount) d. Cost of discount foregone (nominal rate) e. Effective cost of discount foregone Answer: Answer: Answer: Answer: Answer: 4. Kathleen Merchandising buys on terms of 2/10,n/30. Kathleen always pays at the end of the credit term. The finance manager calculates that the average amount of costly trade credit carried is P450,000. Compute for Kathleen Merchandising's average accounts payable balance, assuming a 360 -day year. Answer: 5. Bea Corporation has been given a credit term of 2/10,n/30. The company has been practicing not to pay within the discount period but always pays on time at the end of the credit term. The finance manager is considering borrowing from its bank, using short-term notes payable, and would like to consider taking the discounts. The company wants to determine the effect of this policy change on its net income. Its net purchases are P12,250 per day, the interest rate on the notes payable is 9%, and the tax rate is 30%. If the company implements this plan, what is the expected change in net income? Use a 360-day year. Answer: 6. CMC, Inc. has borrowed P1,000,000. The loan is subject to a 20% compensating balance and has an effective interest rate of 12%. Calculate the quoted interest rate on the loan