Provide answer this question Cash Discount vs LoanJoanne Germano works in an accounts payable department of a majorretailer. She has attempted to convince her boss to take the discounton the 3/15 net 90 credit terms most suppliers offer, but her bossargues that giving up the 3% discount is less costly than a short-termloan at 7%. Prove to whoever is wrong that the other is correct. (Note:Assume a 365-day year.)The cost of giving up the cash discount isdecimal places)%. (round to two

Step 1: Introduction to the Cash Discount vs. Trade CreditA cash payment discount that requires…

Answered: Cash Discount vs Loan Joanne Germano…

PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)

6th Edition

ISBN:9781337117005

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter6: Using Credit

Section: Chapter Questions

Problem 9FPE

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Linda works in an accounts payable department. She has attempted to convince her boss to take the discount on the 3/10 net 45 credit terms most suppliers offer, but her boss argues that giving up the 3% discount is less costly than a short-term loan at 14%. Advise the boss about the least cost of financing. ]b. Analyse the spontaneous sources of short-term financing and unsecured sources of short-term loans
Early payment discount versus loan Joanne Germano works in an accounts payable department of a major retailer. She has attempted to convince her boss to take the discount on the 2/15 net 90 credit terms most suppliers offer, but her boss argues that giving up the 2% discount is less costly than a short-term loan at 10%. Prove to whoever is wrong that the other is correct. (Note: Assume a 365-day year.) The cost of giving up the cash discount is %. (Round to two decimal places.)
Linda works in an accounts payable department. She has attempted to convince her boss to take the discount on the 3/10 net 45 credit terms most suppliers offer, but her boss argues that giving up the 3% discount is less costly than a short-term loan at 14%. Advise the boss about the least cost of financing
Eddie Craft is offered credit terms of 2/10 net 40 by his suppliers. Eddie, however, usually pays in 30 days. He is now considering borrowing money from his bank in order to take advantage of the cash discount being offered. His bank is willing to lend him $20,000 for 180 days by way of a discounted loan with an interest. cost of $1,800. Required: Advise Eddie Craft on what he should do giving your reason.
Vijay
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Camila Martinez has several credit cards, on which she is carrying a total current balance of $6,500. She is considering transferring this balance to a new card issued by a local bank. The bank advertises that, for a 4 percent fee, she can transfer her balance to a card that charges a 0 percent interest rate on transferred balances for the first 6 months. Calculate the fee that Camila would pay to transfer the balance. $ Describe the benefits and drawbacks of balance transfer cards.
1) Ecobank uses a credit-scoring system to evaluate most consumer loans that amount to more than C40000. The key factors used in its scoring system are shown in the table below. The Badu family has two wage earners who have held their present jobs for 20 months. They have lived at their current street address for one year, where they rent on a five-month lease. Their credit report is excellent but shows only one previous charge. However, they are actively using two credit cards right now to help with household expenses. Yesterday, they opened an account at Ecobank and deposited C3000. Badu's have asked for a C50000 loan to purchase a used car and some furniture. The bank has a cut-off score in its scoring system of 30 points. Borrower's length of employment in his/her present job: More than one year Less than one year 3 points Borrower's length of time at current address: More than 2 years One to two years Less than one year Borrower's current home situation: 6 points Owns home Rents…
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1. What are the advantages and disadvantages of offering credit? 2. What precautions should she take before offering credit to people like John? 3. If Kate grants credit to John, the terms will be 2/10, n/30. Assuming the payment is made during the 10-day discount period, what would be the journal entry to record the sale and then subsequent payment? 4. If instead of playing early John pays in 25 days, what would the journal entry to record the payment? 5. Rather than providing the financing directly, assume that Kate decides to allow the use of credit cards. Further, assume that during the month there is 15,000 worth of credit cards sales. Provide the journal entry to record the sales, along with the associated credit card fee. The cost of goods sold total is 13,500.
1. For the best terms on a loan or credit card, you need a credit score above 700. To achieve this, start establishing credit now. Pay all of your bills on time. In addition, use only one-third of your available credit limit and pay off your revolving balance(s) each month. Abby has excellent credit. She wants to purchase a piece of equipment for her business and was offered 6% for 60 months for the $61,000 unit. What is her monthly payment by add-on method? (Round your answer to the nearest cent.) Monthly payment $

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