A supplier is offering your firm a cash discount of 2 percent if purchases are paid for within ten days; otherwise, the bill is due at the end of 60 days. Would you recommend borrowing from a bank at an 18 percent annual interest rate to take advantage of the cash discount offer?

Q: Wrexham Corp. (WC) purchases computer parts from its suppliers 1/15, net 30. However, to take…

A: Effective cost is the total cost of borrowing, not just the interest charges. When you borrow…

Q: Assume the credit terms offered to your firm by your suppliers are 2​/20​, net 40. Calculate the…

A: Discount rate (r) = 0.02 Discount days (D) = 20 Credit term (C) = 40   Cost of trade credit = ?

Q: Kumi Ltd permits its customers to pay with a credit card or to receive a percentage discount ? for…

A: Given:

Q: A store will give you a 4.50% discount on the cost of your purchase if you pay cash today.…

A: The implicit rate of borrowing is the cost paid in the terms of discount by the customer if the…

Q: This card has an introductory APR of 0%.  Credit cards often do this to entice customers.…

A: Introductory APR of 0% means that the card holder can make purchases or transfer a balance  without…

Q: A store will give you a 3% discount on the cost of your purchase if you pay cash today. Otherwise,…

A: Customers who choose to defer payment for the month will be letting go of the discount that they…

Q: a. What effective annual interest rate does the firm earn when a customer does not take the…

A: Companies give discount to the customers for early payment and that is cost to the company and that…

Q: You get a Department Store Credit Card with a Credit limit of $1000. You make a purchase totaling…

A: Credit, operational, market and liquidity risks are among the most serious threats that banks face.…

Q: The First Common Bank has advertised one of its loan offerings as follows: “We will lend you…

A: Interest: It can be defined as the cost incurred by the borrower related to the amount borrowed.

Q: Assume the credit terms offered to your firm by your suppliers are 2/15, net 30 . Calculate the cost…

A: Discount % = 2% Credit Period = 30 daysDiscount Period = 15 daysNumber of day in a year = 365

Q: A store will give a 2.5% disount on the cost of purchase if you pay cash today. The payment is due…

A: Effective annual rate (EAR) is a measure of the true annual interest rate that takes into account…

Q: One of your customers has just made a purchase in the amount of $26,400. You have agreed to payments…

A: A loan is a debt amount borrowed by one person from another person at a predetermined financial…

Q: Hand-to-Mouth (H2M) is currently cash-constrained, and must make a F its suppliers, or take out a…

A: Cost of Credit is the amount of cost which is incur on amount used for a given period of time.It can…

Q: supplier hands you an invoice for $47,000 with the terms 4/20, net 180. a. ) What is the effective…

A: Equivalent Annual Cost -Businesses can utilize Equivalent Annual Cost (EAC) as a crucial tool to…

Q: get help with this question please

A: When the effects of compounding over time are taken into account, the effective annual interest rate…

Q: Do you have a total credit card debt of $6000 you receive an offer to transfer this debt to a new…

A: Annual Percentage Rate(APR) is the specified rate of interest charged by any of the authorizing…

Q: Bank A offers you a loan at 5.76% compounded 2 times a year. Bank B offers to loan you the same…

A: Effective rate is the rate which takes into consideration the impact of compounding frequency. Here…

Q: 3. If you charge $1075 on your credit card and the minimum payment is $96. You only make the minimum…

A: a.If your income and other expenses allow you to make the minimum payment of $96 without causing…

Q: Credit terms. As manager of Fly-by-Night Airlines, you decide to allow customers 90 days to pay…

A: Because you have posted multiple questions , we will answer only the first question. for the…

Q: A consumer loan requires monthly payments, in e amounts, $700.00. The next payment is due in or…

A: Effective rate is the rate after considering the impact of compounding on the interest rate.

Q: A store will give you a 1.00% discount on the cost of your purchase if you pay cash today.…

A: Given information :Discount rate = 1%Time period for payment due = 1 month Purchase price (Assumed)…

Q: What effective annual rate (EAR) are they charging us on the loan?

A: Effective Annual Rate: It refers to the true annual rate on a loan/credit or on investment since it…

Q: A merchant sells a product on credit for S/ 50,000 and offers to pay it to a client in three bills…

A: 1. The face value of the bills.   Particulars Bill 1 Bill 2 Bill 3 Credit sales amount…

Q: Give answer with calculation and explanation, Provide Correct and Incorrect option explanation

A: The objective of this question is to find out how long it will take for the customer to pay off his…

Q: You owe $7200 on a credit card, your company says the minimum payment is 3% of what you owe. How…

A: The amount owed is $7200 APR of 22% The minimum payment is 3% To Find: Time period

Q: A store will give you a 2.25% discount on the cost of your purchase if you pay cash today.…

A: The implicit borrowing rate refers to the rate that is applied to the customers for extending credit…

Q: A store will give you a 5.00% discount on the cost of your purchase if you pay cash today.…

A: Calculation of the implicit borrowing rate being paid by customers: Let's assume that the cost of…

Q: Question Help Credit terms. As manager of Fly-by-Night Airlines, you decide to allow customers 90…

A: a). Holding Period (90 days) return  = 0.021/0.979 = 0.02145 = 2.145% Now find for 2.145% over 60…