for the buyer as well as the seller. Consider this case: Tasty Tuna Corporation buys on terms of 1/20, net 60 from its chief supplier. If Tasty Tuna receives an invoice for $1,254.98, what would be the true price of this invoice? (Note: Round all intermediate calculations to four decimal places, and your final answer to two decimal places.) O $1,553.04 O $1,242.43 O $1,056.07
for the buyer as well as the seller. Consider this case: Tasty Tuna Corporation buys on terms of 1/20, net 60 from its chief supplier. If Tasty Tuna receives an invoice for $1,254.98, what would be the true price of this invoice? (Note: Round all intermediate calculations to four decimal places, and your final answer to two decimal places.) O $1,553.04 O $1,242.43 O $1,056.07
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Firms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit, which affect the cost of asset of sale
for the buyer as well as the seller.
Consider this case:
Tasty Tuna Corporation buys on terms of 1/20, net 60 from its chief supplier.
If Tasty Tuna receives an invoice for $1,254.98, what would be the true price of this invoice? (Note: Round all intermediate calculations to four
decimal places, and your final answer to two decimal places.)
$1,553.04
$1,242.43
$1,056.07
O $931.82
The nominal annual cost of the trade credit extended by the supplier is
calculations to four decimal places, and your final answer to two decimal places.)
, assuming a 365-day year. (Note: Round all intermediate
Suppose Tasty Tuna does not take advantage of the discount and then chooses to pay its supplier late-so that on average, Tasty Tuna will pay its
supplier on the 65th day after the sale. As a result, Tasty Tuna can decrease its nominal cost of trade credit by
by paying late. (Note:
Round all intermediate calculations to four decimal places, and your final answer to two decimal places.)
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