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Business Finance INTERMEDIATE FINAN...-MINDTAP(1 TERM)

a) Introduction: Accounts payable are typically used by the small firms as a form of finance. The amount that the companies owe their suppliers on inventory, products is known as trade credit. Trade credit results in the creation of an account payable on the company's records. To determine: The nominal cost of trade credit The nominal cost of trade credit is 32.25% Nominal cost of trade credit = Discount% 1- discount% × 365 net days = 3% 1-3% × 365 45 -10 = 3 % 97 % × 365 35 =32 .25% b) Introduction: Accounts payable are typically used by the small firms as a form of finance. The amount that the companies owe their suppliers on inventory, products is known as trade credit. Trade credit results in the creation of an account payable on the company's records. To determine: The actual nominal cost of trade credit Actual nominal cost of trade credit is 45.15% Nominal cost of trade credit = Discount% 1- discount% × 365 net days = 3% 1-3% × 365 45 -20 = 3% 97% × 365 25 =45 .15%

a) Introduction: Accounts payable are typically used by the small firms as a form of finance. The amount that the companies owe their suppliers on inventory, products is known as trade credit. Trade credit results in the creation of an account payable on the company's records. To determine: The nominal cost of trade credit The nominal cost of trade credit is 32.25% Nominal cost of trade credit = Discount% 1- discount% × 365 net days = 3% 1-3% × 365 45 -10 = 3 % 97 % × 365 35 =32 .25% b) Introduction: Accounts payable are typically used by the small firms as a form of finance. The amount that the companies owe their suppliers on inventory, products is known as trade credit. Trade credit results in the creation of an account payable on the company's records. To determine: The actual nominal cost of trade credit Actual nominal cost of trade credit is 45.15% Nominal cost of trade credit = Discount% 1- discount% × 365 net days = 3% 1-3% × 365 45 -20 = 3% 97% × 365 25 =45 .15%

INTERMEDIATE FINAN...-MINDTAP(1 TERM)

INTERMEDIATE FINAN...-MINDTAP(1 TERM)

14th Edition

ISBN: 9780357516720

Author: Brigham

Publisher: CENGAGE L

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Chapter 21 Solutions

INTERMEDIATE FINAN...-MINDTAP(1 TERM)

Ch. 21 - a. Working capital; net working capital; net...Ch. 21 - Prob. 2Q Ch. 21 - Is it true that, when one firm sells to another on...Ch. 21 - What are the four elements of a firm’s credit...Ch. 21 - Prob. 5Q Ch. 21 - Prob. 6Q Ch. 21 - Prob. 7Q Ch. 21 - Is it true that most firms are able to obtain some...Ch. 21 - What kinds of firms use commercial paper?Ch. 21 - Prob. 1P

Ch. 21 - Medwig Corporation has a DSO of 17 days. The...Ch. 21 - What are the nominal and effective costs of trade...Ch. 21 - A large retailer obtains merchandise under the...Ch. 21 - A chain of appliance stores, APP Corporation,...Ch. 21 - Prob. 6P Ch. 21 - Calculate the nominal annual cost of nonfree trade...Ch. 21 - Prob. 8P Ch. 21 - Grunewald Industries sells on terms of 2/10, net...Ch. 21 - The D.J. Masson Corporation needs to raise...Ch. 21 - Negus Enterprises has an inventory conversion...Ch. 21 - Strickler Technology is considering changes in its...Ch. 21 - Dorothy Koehl recently leased space in the...Ch. 21 - Suppose a firm makes purchases of $3.65 million...Ch. 21 - The Thompson Corporation projects an increase in...Ch. 21 - The Raattama Corporation had sales of $3.5 million...Ch. 21 - Karen Johnson, CFO for Raucous Roasters (RR), a...Ch. 21 - Prob. 2MC Ch. 21 - Prob. 3MC Ch. 21 - Prob. 4MC Ch. 21 - Prob. 5MC Ch. 21 - Prob. 6MC Ch. 21 - Prob. 7MC Ch. 21 - Prob. 8MC Ch. 21 - What is the impact of higher levels of accruals,...Ch. 21 - Prob. 10MC Ch. 21 - Prob. 11MC Ch. 21 - Prob. 12MC Ch. 21 - Prob. 13MC Ch. 21 - Prob. 14MC Ch. 21 - Prob. 15MC Ch. 21 - Prob. 16MC

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