Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN: 9781337395083
Author: Eugene F. Brigham, Phillip R. Daves
Publisher: Cengage Learning
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Chapter 22, Problem 2Q
Summary Introduction
To determine: The latest date on which the payments and the discount can be taken and the date if discount is not taken.
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A company observes that the value date for an electronic transfer payment to one of
Its suppliers for providing it with components, occurs 3 days earlier than if & issued a
cheque for the same payment and value. So the company prefers to pay the suppler
by cheque. When it realises this, the suppler offers a discount to the company to
incentivise it to pay by electronic transfer instead of by cheque. How much of a
discount in percentage terms should the discount offered by the supplier be? Assume
that an electronic payment cost is 0.5 percent higher than the cost of issuing a cheque
and that the prevalent market discount rate is 5 percent Also assume that there is
float neutrality.
You purchase goods on an invoice dated July 5 with terms of 4/15, n/45 ROG. If you receive the goods on July 23, calculate (a) the last day of the discount period, and (b) the last day of the credit period.
An invoice of $3168 from Scottish Importers has cash terms of 4/20 EOM and is dated June 5. Find (a) the final date on which the cash discount may be taken and (b) the amount necessary to pay the invoice in full if the cash discount is earned.
Chapter 22 Solutions
Intermediate Financial Management (MindTap Course List)
Ch. 22 - Prob. 1QCh. 22 - Prob. 2QCh. 22 - Is it true that if a firm calculates its days...Ch. 22 - Firm A had no credit losses last year, but 1% of...Ch. 22 - Indicate by a (+), (), or (0) whether each of the...Ch. 22 - Cost of Bank Loan On March 1, Minnerly Motors...Ch. 22 - Cost of Bank Loan Mary Jones recently obtained an...Ch. 22 - Del Hawley, owner of Hawleys Hardware, is...Ch. 22 - Gifts Galore Inc. borrowed 1.5 million from...Ch. 22 - Relaxing Collection Efforts The Boyd Corporation...
Ch. 22 - Tightening Credit Terms Kim Mitchell, the new...Ch. 22 - Effective Cost of Short-Term Credit Yonge...Ch. 22 - Monitoring of Receivables
The Russ Fogler Company,...Ch. 22 - Prob. 10PCh. 22 - Prob. 1MCCh. 22 - Prob. 2MCCh. 22 - Prob. 3MCCh. 22 - Prob. 4MCCh. 22 - Prob. 5MCCh. 22 - Prob. 6MCCh. 22 - Prob. 7MCCh. 22 - Assume that it is now July of Year 1 and that the...Ch. 22 - Now assume that it is several years later. The...Ch. 22 - Prob. 10MCCh. 22 - Prob. 11MCCh. 22 - Prob. 12MCCh. 22 - Prob. 13MCCh. 22 - Prob. 14MCCh. 22 - Suppose the firm makes the change but its...
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