Rainbow Inc.'s sales equal $200,000 each month. Rainbow generally permits credit purchases with terms of 3/10 net 30. Ten (10) percent of total sales are for cash, and the remaining 90 percent pay on credit. Of the credit sales, 20 percent are paid on Day 10 of the billing cycle, and the rest pay on Day 30 (in the following month). What is the amount of the discounts that Rainbow's customers normally take?

Q: A large retailer obtains merchandise under the credit terms of 1/10, net 30, but routinely takes 65…

A: Formula to calculate retailer's effective cost of trade credit is as follows: k=(1+100−discount…

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: A company is launching a new sales initiative and expects sales of $446,838 during the first year,…

A: Net working capital (NWC) is a financial metric that represents the difference between a company's…

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: 1. XYZ Company sells books to universities. The company policy is to sell 60% cash and the rest in a…

A: The difference between a company's total revenue and total costs over a given period is known as…

Q: a.  Assume that the cost of goods sold is 60% and that the monthly discount rate is 1%. Looking at…

A: LTV is abbreviated for "Lifetime Value." Lifetime Value, in a business sense, is the overall value…

Q: How much cash will be collected from this month sales?

A: A Cash Discount is a discount over the net payable amount. It is usually offered to lure the…

Q: arge retailer obtains merchandise under the credit terms of 3/20, net 40, but routinely takes 65…

A: Discount=3% if paid within 20 daysCredit period=65 days365 days in yearFind out cost of trade…

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: 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: Kantorovich Company normally takes 25 days to pay for its average daily credit purchases of $1,900.…

A: To determine the net credit position of Kantorovich Company, we need to calculate the net credit…

Q: A large retailer obtains merchandise under the credit terms of 3/10, net 45, but routinely takes 60…

A: The objective of this question is to calculate the effective cost of trade credit for a retailer who…

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: A large retailer obtains merchandise under the credit terms of 3/20, net 45, but routinely takes 60…

A: The formula for calculating the effective cost of trade credit is = (1 + [Discount rate / (1 –…

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: 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: A home gods retailer offers a sales incentive program where customers receive credit towards future…

A: Revenue Allocated to Sales: To put it another way, direct costs comprise all of the labor and…

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

A: DatesNo. of…

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 large retailer obtains merchandise under the credit terms of 3/20, net 35, but routinely takes 65…

A: Trade credit: It is a way to conduct business where there is no involvement of cash but sale or…

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

A: DatesNo. of…

Q: Black Panther Inc. buys on terms of 2/15, net 60 days. It does not take discounts, and it typically…

A: Net purchases = P450,000 Terms of credit = 2/15,net 60 days

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

A: Line of credit (LOC) can be defined as the prespecified of money that can be borrowed from a lender…

Q: A large retailer obtains merchandise under the credit terms of 3/10, net 40, but routinely takes 65…

A: The supplier makes sales on cash as well as on credit. When supplier makes sales on credit it offers…