The answer is C! hope this helped!
Answer: 15.68%
Explanation:
Mr. Warner's cost of not taking the cash discount will be calculated as:
= (3%/100% - 3%) × (360/85 - 14)
= (3%/97%) × (360/71)
= 0.0309278 × 5.0704225
= 0.156817
= 15.68%
Mr. Warner's cost of not taking the cash discount is 15.68%
Answer:
the payback period = 4.86 years
Explanation:
Seattle's cash flows are as following:
Year Cash flow Accumulated cash flows
0 -$150,000 -$150,000
1 $30,000 -$120,000
2 $30,000 -$90,000
3 $30,000 -$60,000
4 $30,000 -$30,000
5 $35,000 $5,000
6 $35,000 $40,000
etc.
The payback period is between year 4 and 5:
- 4 years + ($30,000 / $35,000) = 4.86 years or
- year 4 + [($30,000 / $35,000) x 365 days] = 4 years and 313 days
