Prairie Manufacturing has four possible suppliers, all of which offer different credit terms. Except for the diffe are virtually identical. The credit forme offered by these sunniers are shown in the followina table: (No i Data Table X te cos erm fun liscour m coul this su is viewer (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) hy, would giving Supplier J ing up K L M Credit terms 1/15 net 30 EOM 2/30 net 80 EOM 1/20 net 60 EOM 3/10 net 120 EOM ing up ing up Print Done the ca of the answer boxes. Cash discount decisions Prairie Manufacturing has four possible suppliers, all of which offer different credit terms. Except for the differences in credit terms, their products and services are virtually identical. The credit terms offered by these suppliers are shown in the following table: 2 (Note: Assume a 365-day year.) a. Calculate the approximate cost of giving up the cash discount from each supplier b. If the firm needs short-term funds, which are currently available from its commercial bank at 9%, and if each of the suppliers is viewed separately, which, if any, of the suppliers' cash discounts should the firm give up? c. Now assume that the firm could stretch by 30 days its accounts payable (net period only) from supplier M. What impact, if any, would that have on your answer in part b relative to this supplier? a. The approximate cost of giving up the cash discount from supplier J is %. (Round to two decimal places.) The approximate cost of giving up the cash discount from supplier Kis % (Round to two decimal places.) The approximate cost of giving up the cash discount from supplier Lis %. (Round to two decimal places.) The approximate cost of giving up the cash discount from supplier Mis % (Round to two decimal places.) b. Prairie should the cash discount from supplier J. (Select from the drop down menu) Enter your answer in each of the answer boxes. a. Calculate the approximate cost of giving up the casnic butu b. If the firm needs short-term funds, which are currently available from its commercial bank at 9%, and if each of the suppliers is viewed separately, which any, of the suppliers' cash discounts should the firm give up? c. Now assume that the firm could stretch by 30 days its accounts payable (net period only) from supplier M. What impact, if any, would that have on your answer in part b relative to this supplier? b. Prairie should the cash discount from supplier J. (Select from the drop down menu.) Prairie should the cash discount from supplier K. (Select from the drop down menu.) Prairie should the cash discount from supplier L. (Select from the drop down menu.) Prairie should the cash discount from supplier M. (Select from the drop down menu.) Enter your answer in each of the answer boxes. UUUU JUUS, which are currently available from its commercial bank at 9%, and if each of the suppliers is viewed separately, which, if any, of the suppliers' cash discounts should the firm give up? c. Now assume that the firm could stretch by 30 days its accounts payable (net period only) from supplier M. What impact, if any, would that have on your answer in part b relative to this supplier? Tauro W SITUISCOUTETTUIT SUpper TOITOTUO UUWI TUTTO Prairie should the cash discount from supplier L. (Select from the drop down menu.) Prairie should the cash discount from supplier M. (Select from the drop down menu.) c. If the firm could stretch by 30 days its accounts payable (net period only) from supplier M, Prairie should the cash discount from supplier M because the cost of giving up the cash discount is than the 9% cost of borrowing. (Select from the drop down menus.) Enter your answer in each of the answer boxes. MacBook Air
