10. SM Supermarket purchases P4,562,500 in goods over a 1-year period from its sole supplier. The supplier offers trade credit under the following terms: 2/15, net 50 days. If Hayes chooses to pay on time but not to take the discount, what is the average level of the firm's accounts payable, and what is the effective annual cost of its trade credit? (Assume a 365-day year.) A. P208,333; 17.81% D. P416,667; 27.43% B. P416,667; 17.54% E. P625,000; 23.45% C. P625,000; 17.54%
10. SM Supermarket purchases P4,562,500 in goods over a 1-year period from its sole supplier. The supplier offers trade credit under the following terms: 2/15, net 50 days. If Hayes chooses to pay on time but not to take the discount, what is the average level of the firm's accounts payable, and what is the effective annual cost of its trade credit? (Assume a 365-day year.) A. P208,333; 17.81% D. P416,667; 27.43% B. P416,667; 17.54% E. P625,000; 23.45% C. P625,000; 17.54%
Intermediate Financial Management (MindTap Course List)
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Chapter21: Supply Chains And Working Capital Management
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Problem 10P: The D.J. Masson Corporation needs to raise $500,000 for 1 year to supply working capital to a new...
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![10. SM Supermarket purchases P4,562,500 in goods over a 1-year period from its sole supplier. The supplier offers trade
credit under the following terms: 2/15, net 50 days. If Hayes chooses to pay on time but not to take the discount,
what is the average level of the firm's accounts payable, and what is the effective annual cost of its trade credit?
(Assume a 365-day year.)
A. P208,333; 17.81% D. P416,667; 27.43%
B. P416,667; 17.54% E. P625,000; 23.45%
C. P625,000; 17.54%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5cd33e1b-f543-4a8c-8d70-cd3c12b8d74f%2F1d9de55e-232a-4e10-b6d1-07d775a84a4b%2Fm2rcjdx_processed.jpeg&w=3840&q=75)
Transcribed Image Text:10. SM Supermarket purchases P4,562,500 in goods over a 1-year period from its sole supplier. The supplier offers trade
credit under the following terms: 2/15, net 50 days. If Hayes chooses to pay on time but not to take the discount,
what is the average level of the firm's accounts payable, and what is the effective annual cost of its trade credit?
(Assume a 365-day year.)
A. P208,333; 17.81% D. P416,667; 27.43%
B. P416,667; 17.54% E. P625,000; 23.45%
C. P625,000; 17.54%
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