not use ai solution given correct answer General Accounting Question ABC Electronics is considering extending credit to a newcustomer who wants to order 200 units of a product. ABCsells each unit for $45 and incurs a cost of $32 per unit.What is the minimum probability of payment needed forABC to break even on this credit decision? (Assume thisis a one-time order.)a) 45.0%b) 55.5%c) 71.1%d) 82.2%e) 90.0%

Step 1: Definition of Break-Even Probability in Credit DecisionsThe break-even probability in credit…

Answered: ABC Electronics is considering…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter23: Other Topics In Working Capital Management

Section: Chapter Questions

Problem 8MC

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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.)
Subject - account Please help me. Thankyou.
A seller is considering extending trade credit to an existing customer that buys on cash terms. The customer has just placed a sales order (cash terms) for immediate delivery of 400 units at a sales price per unit of $100. The customer states that they will increase their sales order by 10 units if they receive a 90-day credit period. Variable costs are $65 per unit and involve an immediate cash outflow. If the seller has an annual opportunity cost rate of 7.3%, what is the present value of the cash flows from extending credit to the customer? $14,000.00 $13,625.05 -$26,650.00 $40,275.05
H5. Pipe Manufacturing Company (PMC) is debating whether to extend Credit to a particular customer. PMC’s products, primarily used in the manufactured assembly of Motor Vehicles, currently sell for sh. 1,850 per unit. The variable cost is sh. 1,200 per unit. The order under consideration is 12 units today; payment is promised in 30 days. Required:- (i) If there is a 20% chance of default, should PMC fill the order? The required return is 2% per month. This is a One-Time Sale, and the customer will not buy if credit is not extended. (ii) In general terms, how do you think your answer in Part (a) will be affected if the customer will purchase the Merchandise for cash if the credit is refused? The Cash Price is sh. 1,750 per unit. Show proper step by step calculation
Mahrouq Technologies buys $14,962,649 of materials (net of discounts) on terms of 5/30, net 60, and it currently pays within 30 days and takes discounts. Mahrouq plans to expand, and this will require additional financing. If Mahrouq decides to forego discounts and thus to obtain additional credit from its suppliers, calculate the nominal cost of that credit. Answer in % terms to 2 decimal places (no % sign).
A supplier hands you an invoice for $47,000 with the terms 4/20, net 180. a. ) What is the effective annual cost (expressed as an APR) if you forgo the discount and pay after 180 days?b. )What is the effective annual cost (expressed as an APR) if you pay after 200 days?
Companies that advertise “rent-to-own” dealsare sometimes criticized by consumer advocates for thehigh interest costs built into their rent-to-owncontracts. Rent-A-Center is currently offering a SonyPlayStation 5 Console - Disc Model for $34.99 a weekfor 49 weeks. Alternatively, the “Same as Cash Price” is$1,028.71. What is the APR for Rent-A-Center’s deal?To solve this problem, you must use a financial calculator, Excel, or a TVM calculatorwebsite. What is the effective annual rate for the deal?
Gardner Company currently makes all sales on credit and offers no cash discount. The firm is considering offering a 2 2% cash discount for payment within 15 days. The firm's current average collection period is 60 60 days, sales are 40 comma 000 40,000units, selling price is $ 45 45 per unit, and variable cost per unit is $ 36 36. The firm expects that the change in credit terms will result in an increase in sales to 42 comma 000 42,000 units, that 70 70% of the sales will take the discount, and that the average collection period will fall to 30 30 days. If the firm's required rate of return on equal-risk investments is 25 25%, should the proposed discount be offered? (Note: Assume a365-day year.)
What is the nominal cost?
I need the second Req please! Thank you.
Why is some trade credit called free while other credit is called costly? If a firm buys on terms of2/10, net 30, pays at the end of the 30th day, and typically shows $300,000 of accounts payableon its balance sheet, would the entire $300,000 be free credit, would it be costly credit, or wouldsome be free and some costly? Explain your answer. No calculations are necessary.

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