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Quantitative Problem: Adams Manufacturing Inc. buys $9.7 million of materials (net of discounts) on terms of 2/10, net 60; and it currently pays after 10
Quantitative Problem: Adams Manufacturing Inc. buys $9.7 million of materials (net of discounts) on terms of 2/10, net 60; and it currently pays after 10 days and takes the discounts. Adams plans to expand, which will require additional financing. Ii Adams decides to forgo discounts, how much additional credit could it obtain? Round your answer to the nearest cent. Do not round your intermediate calculations. Use 365 day in a year What would be the nominal and effective cost of such a credit? Round your answer to 2 decimal places. Do not round intermediate calculations. Use 365 day in a year Nominal Effective cost: If the company could receive the unds from a bank at a rate of 7.6% nterest paid monthly, based on 365-day year, what would be the e ective cost o the bank oan? Round your ans er to 2 deci al places. Do not round intermediate calculations cost Should Adams use bank debt or adcitional trade credit? The bank loan should be used Add tional trade credit should be used Check ty Work (2 remaining)
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