Winslow Enterprises reports $40,000 in Accounts Payable on the balance sheet as of December 31, 1996. These payables, on average, will be paid in ten days. Note: Knowledge of present value is required to do this exercise (see Appendix 4A). REQUIRED:

a. Assuming a 12 percent annual discount rate, approximate the present value of the cash out¬ flows associated with the accounts payable.

b. Why are accounts payable carried on the balance sheet at face value instead of present value?