B. Kings Company presents the following information:1. Annual credit sales: P 25,200,0002. Collection period: 3 months3. Rate of return: 12%Kings company considers changing its credit term from n/30 to 3/10, 1/30. Thefollowing are expected to result: (1) 30% of its customers will take advantage of thediscount; (2) sales will remain constant; and (3) the collection period is expected todecrease to two monthsShould the company implement the proposed discount policy? Why?

Given information, Annual credit sales: P 25,200,000 Collection period: 3 months Rate of return: 12%

Answered: B. Kings Company presents the following…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Consider a credit card with an APR of 21.99% and a minimum payment each month of 6% of the new balance. The beginning balance is $675 and no additional charges are made during the next three months and only the minimum payment is made each month. Given the table below, how much does the starting balance decrease after these three payments? Month Starting Balance Finance Charge New Balance Minimum Payment $675 $12.37 $687 37 $41.24 2 $646.13 $11.84 $657.97 $39.48 3 $618.49 $11.33 $629.82 $37.79 4 $592.03 XXX XXX XXX Express your answer rounded to the nearest cent
A declining balance loan for $3000 entails paying about $275 for each of 12 months, for a total of about $3300 in payments. The loans interest rate in 18% per year. How much of the loans second payment goes to paying interest? $41.55 $36.75 $42.58 $45 $40.88
A consumer loan requires monthly payments, in equal amounts, $700.00. The next payment is due in one month. Assume that the appropriate discount rate is 21% (APR). What is the effective annual rate? (show them in excel spreadsheet, write your own present value formulas, don't use Excel built-in functions.
27.03%; $1,270You are offered a credit card with an APR of 25% based on monthly compounding. What is the annual effective rate? If you had a balance of $1,000 on that card and were permitted to make no payments for a year, how much would be owed for that year? 27.03%; $1,270 25%; $1,250 28.07%; $1,281 30.5%; $1,305 29.5%; $1,295
Use the following balance sheet and find the effect on net interest income if the interest on income will rise by 0.5% and interest on liabilities will rise by 0.75%. The two-year runoff is expected in 8-year T-notes by $20. Note: The planning period is 2-years. Liabilities and Equity Overnight Repos Assets $10 75 Cash $170 1 month T-bills (7.05%) 3 month T-bills (7.25%) 2 year T-notes (7.50%) year T-notes (8.96%) 5 year munis (floating rate) (8.20% reset every 6 months) Subordinated debt 75 7-year fixed rate (8.55% 150 50 8 100 25 Equity Total Liabilities & Equity 15 Total Assets $335 $335 (A) $0.375 (B) $0.855 (C) $1.555 (D) $0.585
i need the excel formula
A retail store is offering a diamond ring for sale for 36 months at $150 per month. The retail price is $5,000. What is the annualized interest rate on this offer? 6.76% 5.06% 5.83% 7.22%
What is the effective annual cost of credit terms of 3/15 net 30, if the firm stretches. the accounts payable to 60 days? A) 28.03% B) 1.7% OC) 12.65% OD) 3.35%
CA Inc. assumes new customers will default 15 percent of the time but if they don't default, they will become repeat customers who always pay their bills. Assume the average sale is $500 with a variable cost of $350, and a monthly required return of 1.75 percent. What is the NPV of extending credit for one month to a new customer? Assume 30 days per month.
Please complete the following problem with all steps:
Bank Beta offers a car loan at 16.25% APR, compounded quarterly. What is the Effective Annual Rate (EAR) on the loan? A savings & loans agency is willing to offer a trader a loan of GH¢1,000 at 3.25% per month for a period of 1 year. What is the EAR At the rate of 8.54%, how long will an expected value of GH¢1,000 be if an investment value of GH¢129 is offered today ? How long will it take for GH¢300 to grow to GH¢1,500 at the interest rate specified? 4 percent 8 percent 16 percent Would you rather receive GH¢1,000 a year for 10 years or GH¢800 a year for 15 years if interest rate is 7 percent? interest rate is 18 percent? Why do your answers to (a) and (b) differ?
ABC Bank offers to lend you $50,000 for one year at a quoted annual rate of 8.46% with each payment at the end of each month. DEF Bank also offers to lend you the same amount at a quoted annual rate of 8.63%, with each payment at the end of each quarter. What is the difference in the effective annual rates charged by the two banks? Group of answer choices 0.12% 0.16% 0.14% 0.10% 0.18%

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS