What is the effective annual percentage cost

Assignment Help Finance Basics
Reference no: EM13301249

A firm buys on terms of 2/8, net 45 days, it does not take discounts, and it actually pays after 58 days. What is the effective annual percentage cost of its non-free trade credit? (Use a 365-day year.)

a) 15.89%
b) 19.86%
c) 19.70%
d) 17.64%
e) 13.19%

 

Reference no: EM13301249

Questions Cloud

Evaluate short term liquidity using the ratios : Critically evaluate short term liquidity using the ratios - Discuss the ratio results and not calculate
Calculate the normal force the bottom of the pool : A man of mass 86.5 kg and density 970 kg/m3 stands in a shallow pool with 39.1 % of the volume of his body below water
What is the add-on interest rate for the bank loan : By how much would Jack lower the APR on the bank loan if he opened an account to avoid the credit check and application fees?
Find appropriate cases on the web that you can discuss : In working out your responses to the Discussion Question, you should choose examples from your own experience or find appropriate cases on the Web that you can discuss. Credit will be given for references you make to relevant examples from real compa..
What is the effective annual percentage cost : A firm buys on terms of 2/8, net 45 days, it does not take discounts, and it actually pays after 58 days. What is the effective annual percentage cost of its non-free trade credit? (Use a 365-day year.)
What is the new degree of operating leverage : If the units sold rise from 8,000 to 8,500, what will be the increase in operating cash flow? What is the new degree of operating leverage?
Walmart acquired massmart to enter the south african market : Recently Walmart acquired Massmart to enter the South African market
Strategic decision making for accountants : Examine the success or otherwise of the area's design score indicators nominated and you will need to explain how the decisions and actions taken in that area assisted (or otherwise) to the overall success of the firm's strategy implementation.
What inflation rate is expected after year 1 : If the yield on 3-year Treasury bonds equals the 1-year yield plus 1.5%, what inflation rate is expected after Year 1? Round your answer to two decimal places.

Reviews

Write a Review

Finance Basics Questions & Answers

  Why credit and credit management important for organization

Why is credit and credit management important for organizations? Discuss this from the perspectives of both lender and borrower.

  Calculate a complete dupont analysis

calculate a complete dupont analysis calculating the ROE, ROA, profit margin, total aset turnover and equity mulitiplier from the conocophillips annual report, link to annual report supplied above.

  Finance questions

Financial Slacks. For what kinds of companies is financial slack most valuable? Are there situations in which financial slack should be reduces by borrowing and paying out the proceeds to the stockholders? Explain.

  Explain behavioral phenomena

On May 20, 2004, The Wall Street Journal ran a front page story entitled "Biotech's Dismal Bottom Line: More Than $40 Billion in Losses. " The article makes many points.

  International business comprises currency market

International business comprises currency market and what should be the price of the same disc in Mexico

  What interest rate is the mortgage company charging you

A mortgage company offers to lend you $85,000; the loan calls for payments of $8,538.98 at the end of each year for 30 years. What interest rate is the mortgage company charging you? Round your answer to two decimal places.

  What is the book value of total assets

Klingon's current balance sheet shows net fixed assets of $3 million, current liabilities of $730,000, and net working capital of $228,000. If all the current assets were liquidated today, the company would receive $1.1 million cash.

  Compute the cost of borrowing by using debt

Based on information given above, compute the cost of borrowing by using debt for present company.

  Define the cash conversion cycle

Why is working capital management important to a company? Are there particular industries where managing working capital is more important?

  Discuss the biggest ethical concern

Discuss the biggest ethical concern(s) you have with investing your own money or offering advice to other people investing theirs, and the possible impact these ethical concerns may have on the market overall.

  Cost classification

Outer Banks Shirt Shop produces T-shirts and decorates them with custom designs for retail sale on the premises. Several costs incurred through corporations are listed below.

  How much would the stock be worth at the end

Management expect the dividends to grow at a constant rate of 10% per year. If the required rate of return on the companys stock is 14%, how much would the stock be worth at the end of three years from today?

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