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bonufazy [111]
3 years ago
11

Trade credit and discounts are important strategies used by firms in the daily operations of their business. Calculate the cost

of a firm's trade credit in each of the following situations (answers should be carried out to 2 decimal points, e.g. 35.78%, not 35% or 36% !) a) 2/12, Net 32 b) 3/15, Net 36 c) 2.5/18, Net 35 d) 2.25/20, Net 38
Business
1 answer:
Olegator [25]3 years ago
5 0

Answer:

When a discount is given as 2/12, Net 32, it means that the customer is allowed a 2% discount if they pay off their purchase in 12 days. If they don't, they would have to pay off the full amount in 32 days.

The Cost of a firm's credit is calculated by the formula:

= Discount %/ ( 100% - Discount %) * (360/Allowed payment days - Discount days)

a. 2 / 12, Net 32

= (2%/ (100 - 2% )) * (360 / (32 - 12))

= 36.73%

b) 3/15, Net 36

= (3%/ (100 - 3% )) * (360 / (36 - 15))

= 53.02%

c) 2.5/18, Net 35

= (2.5%/ (100 - 2.5% )) * (360 / (35 - 18))

= 54.30%

d) 2.25/20, Net 38

= (2.25%/ (100 - 2.25% )) * (360 / (38 - 20))

= 46.04%

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4 years ago
Beaverton Lumber purchased a milling machine for $35,000. In addition to the purchase price, Beaverton made the following expend
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Answer:

$41,500

Explanation:

Calculation to determine What was the initial cost of the machine to be capitalized

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3 years ago
As you get closer to needing the money from an investment, what happens to your risk tolerance
Sedbober [7]

Risk tolerance gets lower and lower as you get closer to needing the money from your investment.

If you don't need the money for 50 years, you are more likely to take risks in the stock market or other higher risk investments in return for higher rewards. If you need the money tomorrow, you will not be willing to risk it all in the stock market because even though it <em>could </em>double, you might lose it all.

8 0
3 years ago
At the beginning of the year, the balance in Allowance for Doubtful Accounts is a credit of $760. During the year, $120 of previ
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Answer:

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At the beginning of the year, the account had a credit(positive balance of $760)

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The new balance will be $760 + $120 = $860

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URGENT QUESTION - BUSINESS/COMPUTERS - I JUST NEED ADVICE/HELP
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Hop it helped you and you get a good grade on that assignment 
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3 years ago
Read 2 more answers
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