Simple Simon's Bakery purchases supplies on terms of 1.7/10, net 25. If Simple Simon's chooses to take the discount offered, it must obtain a bank loan to meet its short-term financing needs. Alocal bank has quoted Simple Simon's owner an interest rate of 10.2% on borrowed funds. Should Simple Simon's enter the loan agreement with the bank and begin taking the discount? (Hint: Use365 days for a year.)The cost of forgoing the discount is %. (Round to one decimal place.)Should Simple Simon's enter the loan agreement with the bank and begin taking the discount? (Select the best choice below.)A. Simple Simon's should enter into the loan agreement with the bank and begin taking the discount.B. Simple Simon's should not enter into the loan agreement but should begin taking the discount.C. Simple Simon's should enter into the loan agreement but not begin taking the discount.D. Need more information to answer the question.

The discount rate refers to the interest rate used to calculate the present value of the future…

Answered: Simple Simon's Bakery purchases…

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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Convert the credit card rate to the APR. (Round your answer to the nearest percent.) Nebraska, 0.04084% daily rate %?? Find the APR (rounded to the nearest tenth of a percent) for the loan described below. Purchase a living room set for $3,600 at11% add-on interest for 3 years. %? Find the APR (rounded to the nearest tenth of a percent) for the loan described below. Purchase a refrigerator for $1,500 at 13% add-on interest for 3 years. %? (a) Assume the car can be purchased for 0% down for 60 months (in lieu of rebate). A BMW that has a sticker price of $62,520 with factory and dealer rebates of $6,000 $? b) Find the monthly payment if financed at 2.5% add-on interest for 60 months. (Round your answer to the nearest cent.) $? c) Use the APR approximation formula to find the APR for part (b). (Round your answer to one decimal place.) %? (d) State whether the 0% APR or the 2.5% add-on rate should be preferred.
Ex/ A company sells $10,000 in merchandise to a buyer on finance.Another financial institution has offered to Buy thin loan discounted 4% per year, compounded quantely.How much does the company sell the loan for?
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