Fairview Clinic buys $620,000 in medical supplies each year (at gross 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 a year) A. $13,194 B. $39,583 C. $32,986 D. $26,389 E. $22,431
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- Give me answer this general accounting questionHome Infusion provides an average of 10 home health visits a day at an average net charge of $119 per visit, for $979 in average daily billings (ADB). They provide services approximately 221 days per year. All services are paid by two third-party payers: One pays for half of the billing 24 days after the service is provided and the second pays for the other half of billings in 9 days. Average cost of debt (i.e. the interest rate on bank loans) is 15%. What is the average accounts receivable balance? (Do not round intermediate calculations and round your final answer to 2 decimal places. Omit the "$" sign and commas in your response. For example, $12.3456 should be entered as 12.35.)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
- Home Infusion provides an average of 14 home health visits a day at an average net charge of $94 per visit. They provide services approximately 250 days per year. All services are paid by two third-party payers: One pays for 29 percent of the billing 19 days after the service is provided and the second pays for the remaining billings in 29 days. Average cost of debt (i.e. the interest rate on bank loans) is 3%. What is the average accounts receivable balance? (Round your final answer to 2 decimal places. Omit the "$" sign and commas in your response. For example, $123,456.789 should be entered as 123456.79.) Give typing answer with explanation and conclusionBumpas Enterprises purchases $4,562,500 in goods per year from its sole supplier on terms of 5/10, net 105. If the firm chooses to pay on time but does not take the discount, what is the effective annual percentage cost of its non-free trade credit? (Assume a 365-day year.) a. 21.35% b. 21.78% c. 17.68% d. 20.22% e. 19.57%Help
- ngram Office Supplies, Inc., buys on terms of 2/15, net 50 days. It does not take discounts, and it typically pays on time, 50 days after the invoice date. Net purchases amount to $675,000 per year. On average, what is the dollar amount of costly trade credit (total credit – free credit) the firm receives during the year? (Assume a 365-day year, and note that purchases are net of discounts.) Do not round intermediate calculations. $56,959 $64,726 $78,318 $59,548 $53,723ssence of Skunk Fragrances, Ltd., sells 6,900 units of its perfume collection each year at a price per unit of $399. All sales are on credit with terms of 2/30, net 50. The discount is taken by 50 percent of the customers. a.What is the amount of the company’s accounts receivable? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)b.In reaction to sales by its main competitor, Sewage Spray, Essence of Skunk is considering a change in its credit policy to terms of 4/30, net 50 to preserve its market share. Will this change in policy increase or decrease accounts receivable?YVONE Trading requests credit terms from its trade supplier, Mestle Corporation. YVONE operates 360 days a year. The trade supplier offers two credit terms to YVONE as follows: Credit term number 1: 2/15, net 30 Credit term number 2: 1/10, net 90 Required: 1. Compute the nominal cost of forgoing the cash discount of the two credit terms. 2. Compute the effective cost of credit of the two terms. 3. If the prevailing bank interest rate is 15% of the nominal rate, which credit term should be bypassed to use the money as the source of financing? Discuss your answer briefly. (with solution)
- What is the effective annual percentage cost of its non-free trade credit?Atlanta Cement, Inc. buys on terms of 2/15, net 30. It does not take discounts, and it typically pays 65 days after the invoice date. Net purchases amount to $720,000 per year. What is the nominal annual percentage cost of its non-free trade credit, based on a 365-day year? Please explain process and show calculations.McDowell Industries sells on terms of 3/10, net 30. Total sales for the year are $912,500; 40% of the customers pay on the 10th day and take discounts, while the other 60% pay, on average, 40 days after their purchases. What is the day’s sales outstanding? What is the average amount of receivables? What is the percentage cost of trade credit to customers who take the discount? What is the percentage cost of trade credit to customers who do not take the discount and pay in 40 days. What would happen to McDowell’s account receivable if it toughened up on its collection policy with the result that all nondiscount customers paid on the 30th day?