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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You place an order for 1,100 units of Good X at a unit price of $48. The supplier offers terms of 3/30, net 40. How many days’ credit are you receiving? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
You place an order terms of 2/25, net 45. 000 units of Good X at a unit price of $47. The supplier offers a-1. How long do you have to pay before the account is overdue? a-2. If you take the full period, how much should you remit? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b-1. What is the discount being offered? (Enter your answer as a percent.) b-2. How quickly must you pay to get the discount? b-3. If you do take the discount, how much should you remit? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) c-1. If you don't take the discount, how much interest are you paying implicitly? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) c-2. How many days' credit are you receiving? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
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You place an order for 470 units of inventory at a unit price of $175. The supplier offers terms of 2/15, net 90. a-1. How long do you have to pay before the account is overdue? a-2. If you take the full period, how much should you remit? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b-1. What is the discount being offered? b-2. How quickly must you pay to get the discount? b-3. If you do take the discount, how much should you remit? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) c-1. If you don't take the discount, how much interest are you paying implicitly? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) c-2. How many days' credit are you receiving? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) a-1. Days until overdue a-2. Remittance b-1. Discount offered b-2.…
A4)
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
You place and order for 100 units of inventory at a unit price of P 50.00. The supplier offers terms of 3/30, net 90. How long do you have to pay before the account is overdue? If you take the full period, how much should you remit? How much is the discount offered? How quickly must you pay to get the discount? If you take the discount, how much should you remit? If you don’t take the discount, how much interests are you paying implicitly? How many days’ credit are you receiving?
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).

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