Bernies Bike Shop receives the following trade discounts: 35/25/15. The vendors price list indicates that 35 percent off list price is for purchasing bikes in quantities of 100 or more, 25 percent off list price is for assembling the bikes for customers, and 15 percent is for sales promotion and local advertising.

a. If the manufacturers list price is $470, what should Bernie pay for each bike if he orders 110 bikes at a time, assembles the bikes, and displays and advertises them?

b. What is Bernies single equivalent discount rate?

c. How much will Bernie pay the manufacturer for each bike if he orders 10 bikes at a time and takes advantage of the other discounts?

In Exercise 13, Bernie is given terms of 4/15, n/30, and he pays by day 15.

a. How much will he pay the manufacturer for the order of 110 bikes?

b. For how much will the manufacturer credit Bernies account?

c. If Bernie has a cash flow problem and waits until day 30 to pay the manufacturer, what is his effective cost of financing for the year?