Provide correct answer this question general accounting A firm sells on terms of 3/10, net 30. Total credit sales for theyear are $912,500. Forty percent of customers pay on the10th day and take a discount; the rest pay, on average, 40days after purchase. What is the firm's ACP?A. 40 daysB. 30 daysC. 28 daysD. 22 days

Step 1: Define ACP and DSOACP stands for average collection period or average credit period. It…

Answered: A firm sells on terms of 3/10, net 30.…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 6P

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Similar questions

Medwig Corporation has a DSO of 17 days. The company averages 3,500 in sales each day (all customers take credit). What is the companys average accounts receivable?
If a firm buys on terms of 3/15, net 45, but actually pays on the 20th day and still takes the discount, what is the nominal cost of its nonfree trade credit? Does it receive more or less credit than it would if it paid within 15 days?
Your company has been offered credit terms on its purchases of 4/30, net 90days. What will be the nominal annual cost of trade credit if your companypays on the 35th day after receiving the invoice? (Assume a 365-day year.)a. 30%b. 304%c. 3%d. 87%e. 156%
Your Office Supply has a $42,500 line of credit that charges an annual percentage rate of prime rate plus 3%. Their starting balance on March 1 was $10,600. On March 5, they borrowed $7,500. On March 14, the business made a payment of $3.300, and on March 18, they borrowed $5,300, If the current prime rate is 9%, what is the new balance? a) $18,400.29 O b) s27,583.43 O c) $20,276.10 d) $26,100.00
Harper Corp.'s sales last year were $395,000, and its year-end receivables were $42,500. Harper sells on terms that call for customers to pay 30 days after the purchase, but many delay payment beyond Day 30. On average, how many days late do customers pay? Base your answer on this equation: DSO - Allowed credit period = Average days late, and use a 365-day year when calculating the DSO. O a. 9.74 b. 8.37 Oc8.81 Od. 7.95 Oe. 9.27
Your office supply has a line of credit that charges an annual percentage rate of prime rate plus 3%. Their starting balance on March 1st was $10,600. On March 5th they borrowed $7,500. On March 14th the business made a payment of $3,300 and in March 18th they borrowed $5,300. If the current prime rate is 9% what is the new balance? $26,100.00 $20,276.10 $27,583.43 $18,400.29
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Fil Development 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 P550,000 per year. On average, what is the dollar amount of total trade credit (costly + free) the firm receives during the year, i.e., what are its average accounts payable? (Assume a 365-day year, and note that purchases are net of discounts.) P 90,411 O P109,895 P 99,678 O P 94,932 P104,662
5. Kirk Development 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 $225,000 per year. On average, what is the dollar amount of total trade credit (costly + free) the firm receives during the year, i.e., what are its average accounts payable? (Assume a 365-day year, and note that purchases are net of discounts.)
Assume the credit terms offered to your firm by your suppliers are 2/20, net 40. Calculate the cost of the trade credit if your firm does not take the discount and pays on day 40. (Hint: Use a 365-day year.)
11. Ingram Office Supplies, Inc., buys on terms of 2/15, net 50 days. It does not take discounts, and it typically pays on time, 50 days after the invoice date. Net purchases amount to $250,000 per year. On average, what is the dollar amount of costly trade credit (total credit – free credit) the firm receives during the year? (Assume a 365-day year, and note that purchases are net of discounts.) a. $22,534 b. $23,973 c. $26,610 d. $19,897 e. $29,247
A firm is offered trade credit terms of 3/15, net 30 days. The firm does not take the discount, and it pays after 50 days. What is the effective annual cost of not taking this discount? (Assume a 365-day year.) * 37.39% 44.30% 45.50% 30.00% 32.25%

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A firm sells on terms of 3/10, net 30. Total credit sales for the year are $912,500. Forty percent of customers pay on the 10th day and take a discount; the rest pay, on average, 40 days after purchase. What is the firm's ACP? A. 40 days B. 30 days C. 28 days D. 22 days