Kyoto Joe, Incorporated, sells earnings forecasts for Japanese securities. Its credit terms are 3/20, net 40. Based on experience, 70 percent of all customers will take the discount. Assume 365 days per year. What is the average collection period? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. If the company sells 1,370 forecasts every month at

Q: Miyagi Data, Inc., sells earnings forecasts for Japanese securities. Its credit terms are 3/25, net…

A: Credit Term of 3/25, Net 50 shows that buyers will get discount of 3% if payment is made in 25 days…

Q: You prefer to extend credit on the assumption that you will be paid in full within 10 days of the…

A: Variables in the question:Average inventory=$ 720,000Cash sales (no credit sales)= $4,400,000…

Q: Assume the credit terms offered to your firm by your suppliers are 2​/20​, net 40. Calculate the…

A: Discount rate (r) = 0.02 Discount days (D) = 20 Credit term (C) = 40   Cost of trade credit = ?

Q: A firm with sales of $22,000,000 has inventory of $800,000. The firm has cash sales (all sales are…

A: Answer    Inventory  storage period in days =            Inventory  / cost of goods sold  × 365…

Q: A large retailer obtains merchandise under the credit terms of 3/10, net 30, but routinely takes 60…

A: Every business needs goods and services to be purchased for its business. It can be on cash basis or…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Interest rate= Prime rate +4% = 8% + 4%= 12% Interest is calculated for the number of days on…

Q: Miyagi Data, Inc., sells earnings forecasts for Japanese securities. Its credit terms are 3/20, net…

A: Credit Term of 3/20, Net 40 shows that buyers will get discount of 3% if payment is made in 20 days…

Q: Miyagi Data, Inc., sells earnings forecasts for Japanese securities. Its credit terms are 2/30, net…

A: Average collection period: It is the time period that business takes to collect its payment from its…

Q: Gallant Sdn. Bhd., offers a credit period of 4 weeks.  The price and cost per unit of its product…

A: Since you have posted more than 3 sub-parts, we will provide the solution only to the first three…

Q: a. What effective annual interest rate does the firm earn when a customer does not take the…

A: Companies give discount to the customers for early payment and that is cost to the company and that…

Q: McDowell Industries sells on terms of 4/10, net 40. Total sales for the year are $825,500. Thirty…

A: Discounted customers=15×30%=4.5 days

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Prime rate The current interest rate charged by the financial institution to its customers is known…

Q: Cook's security system has a $37,500 line of credit, which charges an annual percentage variety of a…

A: The line of credit is a pre-approved limit offered by financial institutions or banks. You can draw…

Q: ou prefer to extend credit on the assumption that you will be paid in full within 42 days of the…

A: Solution:- As given in the question, Firm X has an average inventory of $640,000 and sales of…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: the line of credit is a pre-approved limit offered by financial institutions, banks, etc, you can…

Q: ection period. BECK does not offer discounts for early payment; thus, customers take the full 30…

A: Basic concept of cash discount and receivable collection period

Q: On average, it will take you sell to the firm on credit. days to receive the payments, therefore,…

A: The operating cycle of a firm is time period from the purchase of raw materials till the receipt of…

Q: Mavericks Cosmetics buys $3,305,717 of product (net of discounts) on terms of 5/10, net 60, and it…

A: Effective percentage cost of trade credit considers the compounding effect.Following is the formula…

Q: Assume the credit terms offered to your firm by your suppliers are 2/15, net 30 . Calculate the cost…

A: Discount % = 2% Credit Period = 30 daysDiscount Period = 15 daysNumber of day in a year = 365

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Cook security systems has line of credit = $37500 Annual charge rate = 4% On October 1, Opening…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Solution- Interest rate = 6% +4% = 10%   Rate of interest charged each day = 10% / 360 = 0.02778%…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: The objective of the question is to calculate the new balance of Cook Security Systems' line of…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Variables in the question:Prime rate=8%Annual % rate charged=Prime rate +4%=8%+4%=12%Balance on…

Q: 3) A large retailer obtains merchandise under the credit terms of 3/10, net 30, but routinely takes…

A: Discount Rate = 3% Discount Period = 10 days Credit Period = 50 days

Q: Aggarwal Inc. buys on terms of 2/15, net 45, and it always pays on the 45th day. The CFO calculates…

A: We know that:The average amount of costly trade credit carried by the firm is $275,000.The firm pays…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Given, Cock security system has $37500 line of credit  Annual percentage rate  = 4% october pmt -…

Q: Cost of commercial paper Better Effort Corporation sold an issue of 106-day commercial paper with a…

A: Commercial Paper = 106Face Value = $1.3millionProceeds = $1285230Period = 365

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: The current balance will be a function of opening balance, fresh borrowing, less repayment and the…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Interest rate applicable = Prime rate + premium Interest will be charge when the line of credit…

Q: The Branding Iron Company sells its irons for $57 apiece wholesale. Production cost is $47 per iron.…

A: The excess of cash flow's present worth over the initial cost indicates any project or investment's…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: The line of credit is the maximum limit of credit that a customer can avail from the financial…

Q: AL Enterprises purchases P4,562,500 in goods per year from its sole supplier on terms of 2/15, net…

A: Discount rate = 0.02 (i.e. 2%) Allowed payment days = 50 Discount days = 15

Q: Until recently, Augean Cleaning Products sold its products on terms of net 69, with an average…

A: Net present value (NPV):Net present value (NPV) is a financial metric that takes the time value of…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Calculation of new balance are as follows

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: New balance  = balance  on 31 October  + interest

Q: Newsome Inc. buys on terms of 4/10, net 45. It does not take the discount, and it generally pays…

A: Effective annual percentage = (1+[Discount rate/(1–Discount Rate)])^n– 1 Where n= No. of days in a…

Q: Bumpas Enterprises purchases $4,562,500 in goods per year from its sole supplier on terms of 5/10,…

A: Trade credit is a type of credit that is extended by a business to its customers. It allows…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: DatesNo. of…

Q: Miyagi Data, Inc., sells earnings forecasts for Japanese securities. Its credit terms are 1/10, net…

A: The credit policy is an important part of decision making related with the working capital in credit…

Receivables Management