Cost accounting MCQ Fairview Clinic buys $620,000 in medical supplies each year (atgross prices) from its major supplier, Consolidated Supplies,which offers the clinic terms of 6/10, net 30.What is Fairview Clinic's costly trade credit? (365 days in ayear)A. $13,194B. $39,583C. $32,986D. $26,389E. $22,431

ExplanationCalculating Fairview Clinic's Costly Trade CreditFairview Clinic receives a discount of…

Answered: Fairview Clinic buys $620,000 in…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 6P

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What is Fairview clinic's costly trade credit?
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H4. Resolute Health buys $600,000 of a particular item (at gross prices) from its major supplier, Cardinal Health, which offers Resolute terms of 2/10, net 30. Currently, the hospital is paying the supplier the full amount due on Day 30, but it is considering taking the discount, paying on Day 10 and replacing the trade credit with a bank loan that has a 12 percent rate. Assume 360 days per year. What is the amount of free trade credit that the organization obtains from Cardinal Health? Format is $xx,xxx.xx What is the total amount of trade credit offered by Cardinal? Format is $xx,xxx.xx What is the approximate annual cost of the costly trade credit? Format is xx.xx% Should the organization replace a portion of the trade credit with the bank loan? Format is Yes or No If the bank loan is used, how much of the trade credit should be replaced? Format is $xx,xxx.xx
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