How much will be the finance cost savings cost

Assignment Help Financial Accounting
Reference no: EM132678717

Del Mar Company purchased inventory costing P2,000,000 (gross of purchase discounts based on payment terms 2/10, n/30). Del Mar wants to determine which is better regarding the purchase transaction whether to finance the purchase by issuing 20% simple interest note to a bank to avail the discount on the 10th day which is to be paid at the 30th day after the purchase, or to forego the discount and pay the gross purchase on the 30th day after the purchase. Assume 360 days per year is used in determining the interest.

Problem a. What will be the nominal cost of trade credit?

Problem b. If Del Mar choose to avail the discount by issuing a note payable, how much will be the finance cost savings/additional cost?

Reference no: EM132678717

Questions Cloud

One-time tax rate-social services initiatives : Real estate magnate Donald Trump once proposed a one-time tax of 14.25 percent on the net wealth of every American with more than $10 million
Calculate the effective annual interest rate : Del Hawley is negotiating with City Bank for a P50,000, Calculate the effective annual interest rate and choose which alternative Hawley will avail
Describe interesting things you learned from the interview : In the Assignment 01.2, you were asked to outline questions and perform a brief interview with a healthcare professional about the implementation of a new.
Styles made the leaders effective or ineffective : Write a paper that analyzes the traits and styles of both leaders and determines which traits and styles made the leaders effective or ineffective.
How much will be the finance cost savings cost : Del Mar Company, If Del Mar choose to avail the discount by issuing a note payable, how much will be the finance cost savings/additional cost?
Which ethical theorists have the most to say about the aca : What new ethical conflicts might your hospital face as a result of the ACA? Which ethical theorists have the most to say about the ACA?
State and federal organizational levels : Write a paper in which you identify, compare, and contrast the policing function at the local, state, and federal organizational levels.
Compute the surcharge and interest penalty due : Depositors in the month of April 2016, It wants to settle the unpaid final withholding tax on June 10, 2017. Compute the surcharge and interest penalty due.
Ethical dilemmas-breaches and leadership consequences : Government and nonprofit leaders encounter ethical dilemmas regularly as they perform their duties.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd