Mahrouq Technologies buys $12,726,823 of materials (net of discounts) on terms of 1/30, net 60, and it currently pays within 30 days and takes discounts.  Mahrouq plans to expand, and this will require additional financing.  If Mahrouq decides to forego discounts and thus to obtain additional credit from its suppliers, calculate the nominal cost of that credit. Answer in % terms to 2 decimal places (no % sign).

Q: Commercial paper is usually sold at a discount. Mucus Corporation has just sold an issue of 90-day…

A: When the effects of compounding over time are considered, an effective annual interest rate is the…

Q: Suncoast Boats Inc. estimates that because of seasonal nature of its business, it will borrow…

A: Loan is a contract between two parties the lender and the borrower of the finance. This contract of…

Q: The Snedecker Corporation is considering a change in its cash-only policy. The new terms would be…

A: = Sales*(selling price- cost price) = 2,150*(53-31)= 47,300

Q: In evaluating a proposal to extend credit , new customers will generate an average of $19000 per day…

A: Net profit = Sales less COGS less administration expense

Q: uppose you are in the market for a new carworth $28,000. You are offered a deal to make a$4,000 down…

A: (a) Calculate the monthly payment as shown below: The result of the above table is as shown below:…

Q: 8 Brampton Truck Parts needs $652,000 to take a cash discount of 2.50/10, net 70. A banker will loan…

A: 1. Loan Amount Needed: $652,0002. Cash Discount: 2.50%3. Discount Period: 10 days4. Credit Terms:…

Q: Use 360 days in a year. Solutions must be complete (including formulas). Present rates in percent…

A: Discount is a selling goods or service below the price of goods. This reduction in price is offered…

Q: A new supplier has offered your firm the credit terms 2/10, Net 30 on a $1,000,000 order. Late…

A: Suppliers usually offer credit terms to the buyers which aim to incentivize the buyer for making…

Q: The D.J. Brothers Corporation needs to raise Ks. store. Brothers buys from its suppliers on terms of…

A: Companies give trade discounts to customers to pay early because the companies can use money…

Q: What is the highest rate, simple interest at which the buyer can afford to borrow money in order to…

A: Highest Simple Rate: The highest simple rate is also known as the break-even rate. It is computed by…

Q: Suppose Dina is choosing how to allocate her portfolio between two asset classes: risk-free…

A: Here,CombinationFraction of Portfolio in Diversified Stocks (%)Average Annual Return (%)Standard…

Q: In evaluating a proposal to extend credit , new customers will generate an average of $13000 per day…

A: Net present value refers to the difference between the present value of all cash inflows of all cash…

Q: Compost Wholesalers presently uses a public warehouse agreement to finance most of its inventory.…

A: Answer 1 Bank Rate = 5.5% Transaction Cost = 1.5%  Effective Rate = 5.5% + 1.5% =7.0% So, Period…

Q: MJ, Inc. made a $15,000 sale. Due to their weak competitive position, the firm had to offer trade…

A: Present value is the equivalent value of the money today based on the time value of money and…

Q: Dome Metals has credit sales of $198,000 yearly with credit terms of net 120 days, which is also the…

A: Increase in profit = Current sales* increase in sales%= 198,000*20%*25% = 9,900Old accounts…

Q: Ivanhoe Traders has annual sales of $1,600,000. The firm's financial manager has determined that…

A: Cash management focuses on the efficient collection, and investment of cash within a company.…

Q: NATO Co.’s business is booming, and it needs to raise more capital.  The company purchases supplies…

A: Here, Discount Rate is 1% Days of Discount is 10 days Days of Payment without adverse effect is 30…

Q: Telephone Sellers Inc. sells prepaid telephone cards to customers. Telephone Sellers then pays the…

A: Here in January prepaid cards sold having value = $4000

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: 2. Mala-Inse Company needs P5,000,000 short-term credit for 90 days. To produce the amount, the…

A: Financing cost: It refers to the cost of raising funds for the business including flotation costs,…

Q: Illustration: A company sells $50,000 of goods with the terms net/30. The receivable is immediately…

A: Sales price = $50,000 Factor fee = 3% Interest = 10% reserve = 8%

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: calculate the present value of this cash outflow assuming trade credit terms of a) 30 days b) 45…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

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: 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: Wontaby Ltd. is extending its credit terms from 30 to 45 days. Sales are expected to increase from…

A: The additional financial requirement will be multiplied by the cost of acquiring additional funds…

Q: he Milton Company currently purchases an average of $18,000 per day in raw materials on credit terms…

A: When a company purchases goods on credit, the seller specifies the terms of payment on the invoice.…

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: A firm can lease a truck for 4 years at a cost of $36,000 annually. It can instead buy a truck at a…

A: The equivalent annual cost is used to assess the total cost of various financing or investment…

Q: H4. Resolute Health buys $600,000 of a particular item (at gross prices) from its major supplier,…

A: Credit cost refers to the value of expenses that are charged to a borrower while signing the…

Q: Peanut Inc. is evaluating whether to change its credit terms from 2/10 net 30 to 3/10 net 30. At…

A: Account receivables (AR) is current assets (CA) for the firm. To make effective collections and…

Q: A wholesale company needs to borrow $600,000 to finance inventory for the upcoming seasonal rush.…

A: A borrower gets an interest quote for a borrowing, however it needs to maintain a compensating…

Q: Lancaster Lumber buys $8 million of materials (net of discounts) on terms of 3/5, net 40, and it…

A: Trade credit is the sales made on  credit, recorded as accounts receivables by the seller, and as…

Q: mine plc has annual credut of k15m and allows 90 days credit. it is consideringba 2% discount…

A: Calculation of Current Interest Cost Note: Since the customers pay back after 90 days, amount due…

Q: Ex/ A company sells $10,000 in merchandise to a buyer on finance.Another financial institution has…

A: FV is the $10,000 in merchandise the company sold,r is the discount rate of 4% per year (0.04 as a…

Q: þalagang Pilipina Company needs P5,000,000 short-term credit for 90 days. To produce the amount, the…

A: The question is based on the concept of discounting and the issue of commercial paper(CP) for short…

Q: Honda is selling a 2014 Accord Coupe EX M for $30,057 including freight, PDI and all applicable…

A: The future value is the amount of money on a future date. It can be calculated using the time value…

Q: Quantitative Problem: Adams Manufacturing Inc. buys $11 million of materials (net of discounts) on…

A: 1) 2/10 net 50 means the company gets a 2% discount if they pay within 10 days, otherwise the whole…

Q: What is the effective annual interest rate of this trade credit?

A: Credit term can be defined as the payment period for the credit sale or purchase of goods, which is…