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Aggarwal Inc. buys on terms of 2/15, net 45, and it always pays on the 45th day. The CFO calculates that the average amount of costly trade credit carried is $275,000. What is the firm's average accounts payable balance? Assume a 365-day year. a. $330,000 b. $366,667 c. $409,750 d. $412,500 e. $359,333

Aggarwal Inc. buys on terms of 2/15, net 45, and it always pays on the 45th day. The CFO calculates that the average amount of costly trade credit carried is $275,000. What is the firm's average accounts payable balance? Assume a 365-day year. a. $330,000 b. $366,667 c. $409,750 d. $412,500 e. $359,333

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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What is the firm's average accounts payable balance ?

Aggarwal Inc. buys on terms of 2/15, net 45, and it always pays on the 45th day. The CFO calculates that the average amount of costly trade credit carried is $275,000. What is the firm's average accounts payable balance? Assume a 365-day year. a. $330,000 b. $366,667 c. $409,750 d. $412,500 e. $359,333
Transcribed Image Text:Aggarwal Inc. buys on terms of 2/15, net 45, and it always pays on the 45th day. The CFO calculates that the average amount of costly trade credit carried is $275,000. What is the firm's average accounts payable balance? Assume a 365-day year. a. $330,000 b. $366,667 c. $409,750 d. $412,500 e. $359,333
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