52. ABC Company buys P8,000,000 of materials net of discount on terms 3/5,net 60; and it currently pays after 5 days and takes discounts. It plans to expand,which will require additional financing. If it decides to forego discounts, whatwould be the nominal cost of that credit? [nearest % 2 decimal places]53. ABC Corporation produces Product X. It turns out 1,500 units a day at a costof P6 per unit for direct materials, direct labor and factory overhead. It takes thefirm 22 days to convert raw materials into a battery. ABC allows its customers 40days in which to pay for Product X, and the firm generally pays its suppliers in 30days. By what amount could ABC reduce its working capital financial needs if itwas able to stretch its payables deferral period to 35 days? [nearest peso]

Name: 52. ABC Company buys P8,000,000 of materials net of discount on terms
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Description: 52. ABC Company buys P8,000,000 of materials net of discount on terms 3/5,net 60; and it currently pays after 5 days and takes discounts. It plans to expand,which will require additional financing. If it decides to forego discounts, whatwould be the

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52. ABC Company buys P8,000,000 of materials net of discount on terms 3/5, net 60; and it currently pays after 5 days and takes discounts. It plans to expand, which will require additional financing. If it decides to forego discounts, what would be the nominal cost of that credit? [nearest % 2 decimal places]

52. ABC Company buys P8,000,000 of materials net of discount on terms 3/5, net 60; and it currently pays after 5 days and takes discounts. It plans to expand, which will require additional financing. If it decides to forego discounts, what would be the nominal cost of that credit? [nearest % 2 decimal places]

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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1) A factoring company discounts a client a document with a maturity value of 40,000 at a discount rate of 16% simple per year with a maturity of 90 days. On the same day, the factoring company discounts the document at a financial institution that offers a discount rate of 15% simple annual rate. What was the profit that the factoring company obtained? options: 100 72 181 142
Bumpas Enterprises purchases $4,562,500 in goods per year from its sole supplier on terms of 4/10, net 65. If the firm chooses to pay on time but does not take the discount, what is the effective annual percentage cost of its non-free trade credit? (Assume a 365-day year.) a. 21.98% b. 27.65% c. 29.49% d. 31.12% e. 28.46%
A commercial bill with a face value of $100,000 has a current price of $97,711. This bill has 95 days to maturity what is its yield? (answer is in percentage e.g. 15%) Can you please tell me the right formula to get this and why? Also, can you please solve the problem using the formula so I can see how to do it?
Honesty Company is investing in 5-year treasury bills with a face value of P500,000 and annual interest rate of 5%.How much is the market value assuming a 360 days in a year?Honesty Company is investing in 91-day treasury bills with a total fair market value of P2,500,000 for a purchase price of P2,475,000.What is the annualized discount rate (round off your answer to two decimal places)?
Black Panther Inc. buys on terms of 2/15, net 60 days. It does not take discounts, and it typically pays on time, 60 days after the invoice date. Net purchases amount to P450,000 per year. On average, how much “free" trade credit does the firm receive during the year? (Assume a 365-day year, and note that purchases are net of discounts.) * O P19,418 P20,389 P21,408 P22,479 P18,493
50
vi. Subject Finance
1. ABC Co has credit sales of $45 million per year and on average settles accounts with trade payables after 60 days. One of its suppliers has offered the company an early settlement discount of 0·5% for payment within 30 days. Administration costs will be increased by $500 per year if the early settlement discount is taken. ABC Co buys components worth $1·5 million per year from this supplier. From a different supplier, ABC Co purchases $2·4 million per year of Component L at a price of $5 per component. Consumption of Component L can be assumed to be at a constant rate throughout the year. The company orders components at the start of each month in order to meet demand and the cost of placing each order is $248·44. The holding cost for Component L is $1·06 per unit per year. The finance director of ABC Co is concerned that approximately 1% of credit sales turn into irrecoverable debts. In addition, she has been advised that customers of the company take an average of 65 days to…
24) Can i get help with this question please
on a a discount basis. Problem 7 COST OF TRADE CREDIT AND BANK LOAN Lamar Lumber buys $8 million of materials (net of discounts) on terms of 3/5, net 60, and it currently pays after 5 days and takes discounts. Lamar plans to expand. which will require additional financing. a) If Lamar decides to forgo discounts how much additional credit could it get and what would be the nominal and effective cost of that credit? P) J the company could get the funds from a bank at a rate of 10%, interest paid monthly, based on a 365-day year, what would be the effective cost of the bank loan? (C) Should Lamar use bank debt or additional trade credit? Explain. Page 121 of 161
37
3.- The Company Surteco sells 10.000 units of their wrapped moluldings for 1.5€/unit, per year. They are offering 3/10, n30, and the discount is taken by 40% of the customers. What is the total value of the Accounts receivable? In order to gain market share against Lamidecor, their competitor, they are thinking about offering 4/5,n45. What is now the new value for accounts receivable if the % of discount taken is still 40%?

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