Answered: How much does the account stretching…

Name: Cash Crunched Company (CCC) purchases computer parts from its supplier
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Description: Cash Crunched Company (CCC) purchases computer parts from its suppliers 2/5, net 60. However, CCC routinely stretches accounts payable 10 days beyond the due date. How much does the account stretching reduce the cost of not taking the trade discoun

Business

Finance

How much does the account stretching reduce the cost of not taking the trade discount? Select one:

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter18: The Management Of Accounts Receivable And Inventories

Section: Chapter Questions

Problem 5QTD

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Cash Crunched Company (CCC) purchases computer parts from its suppliers 2/5, net 60. However, CCC routinely stretches accounts payable 10 days beyond the due date. How much does the account stretching reduce the cost of not taking the trade discount?

Select one:

2.04%

2.34%

12.01%

14.35%

None of the above.

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