Gazapizm Corporation is a manufacturing company and has estimated that they need $2,400,000 to put a new pump into operation. The company can finance the the new pump by delaying payment to its suppliers. Presently the company has a supplier which sells on credit with credit terms of 2/15, net 45 days. If the firm does not take the discount and pays on the 50th day, then what is the effective annual cost? (Assume a 365-day year.) 20.53% 23.45% 18.93% 16.71%
Gazapizm Corporation is a manufacturing company and has estimated that they need $2,400,000 to put a new pump into operation. The company can finance the the new pump by delaying payment to its suppliers. Presently the company has a supplier which sells on credit with credit terms of 2/15, net 45 days. If the firm does not take the discount and pays on the 50th day, then what is the effective annual cost? (Assume a 365-day year.) 20.53% 23.45% 18.93% 16.71%
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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Gazapizm Corporation is a manufacturing company and has estimated that they need $2,400,000 to put a new pump into operation. The company can finance the the new pump by delaying payment to its suppliers. Presently the company has a supplier which sells on credit with credit terms of 2/15, net 45 days. If the firm does not take the discount and pays on the 50th day, then what is the effective annual cost? (Assume a 365-day year.)
20.53%
23.45%
18.93%
16.71%
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