Hm Prob 1, 2, 3

2Emphasin Heading1 Noma Stong Subtitle Tale 1No Spac.. Subtle Em.. Intense E.. Quote Intense Q. Subtie Ref. Inte Home work Problem 1 * Cash Discounts. You place an order for 540 units of Good X at a unit price of $62. The supplier offers terms of 1/10, net 30 A How long do you have to pay before the account is overdue? If you take the full period, how mach should you remit? the discount? If you do take the discount, how mach should you remit? implicitly? How many days' credit are you receiving? B. What is the discount being offered? How quickly must you pay to get . C. If you don't take the discount, how much interest are you paying Problem 2 Size of Accounts Receivable. Essence of Skunk Fragrances, Ltd, sells 7,400 units of its perfame collection each year at a price per unit of $235. All sales are on credat with terms of 1/10, net 30. The descount is taken by 40 percent of the customers. What is the amount of the company's accounts receivable? In reacticn to sales by its main competitor, Sewage Spray, Essence of Skunk is considering a change in its credit policy to ternms of 3/10, net 30 to preserve its market share How will this change in policy affect accounts receivable? Problem 3 Terms of Sale. A firm offers terms of 1/10, nct 30. What effective annual interest rate does the firm earn when a customer does not take the discount? Without doing any calculations, explain what will happen to this effectve rate A. The discount is changed to 2 percent B. The credst period is increased to 40 days C The discount period is decreased to 20 day. . D. What is the EAR for each scenario