Answered: calculate the present value of this…

Business

Finance

calculate the present value of this cash outflow assuming trade credit terms of a) 30 days b) 45 days c) 60 days

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 17P

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Memphis Metro just made a $75,000 purchase from a supplier, subject to the extension of suitable trade credit terms. Using a discount rate of 7%, calculate the present value of this cash outflow assuming trade credit terms of

a) 30 days

b) 45 days

c) 60 days

d) 90 days

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