A firm offers terms of 1/10, net 30. What effective annual interest rate does the firm earn
Question:
A firm offers terms of 1/10, net 30. What effective annual interest rate does the firm earn when a customer does not take the discount? What will happen to this effective rate if
a. The discount is changed to 2 percent.
b. The credit period is increased to 60 days.
c. The discount period is increased to 15 days.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 75% (8 reviews)
The interest rate for the term of the discount is In...View the full answer
Answered By
Muhammad Umair
I have done job as Embedded System Engineer for just four months but after it i have decided to open my own lab and to work on projects that i can launch my own product in market. I work on different softwares like Proteus, Mikroc to program Embedded Systems. My basic work is on Embedded Systems. I have skills in Autocad, Proteus, C++, C programming and i love to share these skills to other to enhance my knowledge too.
3.50+
1+ Reviews
10+ Question Solved
Related Book For
Essentials of Corporate Finance
ISBN: 978-1260013955
10th edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
Question Posted:
Students also viewed these Corporate Finance questions
-
A firm offers terms of 2/10, net 30 a-What effective annual interest rate does the firm earn when a customer does not take the discount? (Use 365 days a year. Do not round intermediate calculations....
-
A firm offers terms of 2/10, net 40. What effective annual interest rate does the firm earn when a customer does not take the discount? Without doing any calculations, explain what will happen to...
-
A firm offers terms of 1/10, net 25. What effective annual interest rate does the firm earn when a customer does not take the discount? Without doing any calculations, explain what will happen to...
-
(a) An n n matrix K is the encryption matrix for the Hill cipher. Give the encryption formula. (b) The plaintext is (2, 5, 1,0). Encrypt it (show your work and the ciphertext) using the Hill cipher...
-
(a) What is the difference between the expected change in the exchange rate and the forward discount or forward premium on the foreign currency? (b) When would the expected change in the exchange...
-
Write an expression that produces random integers in each of the following ranges using the variable Range. a. 1 through 4 b. 0 through 3 c. 2 through 7
-
Suppose that \(x_{i}\) only takes on the values 0 and 1. Out of the \(n\) observations, \(n_{1}\) take on the value \(x=0\). The \(n_{1}\) observations have an average \(y\) value of \(\bar{y}_{1}\)....
-
A monatomic ideal gas expands slowly to twice its original volume, doing 300 J of work in the process. Find the heat added to the gas and the change in internal energy of the gas if the process is...
-
What accounts are affected, and in which direction, by the following business activity? Use account names from the expanded accounting equation. Purchase supplies for $ 2 0 0 cash. Question 2 5...
-
A supersonic flow at M 1 = 1.58 and P 1 = 1 atm expands around a sharp corner. If the pressure downstream of the corner is 0.1306 atm, calculate the deflection angle of the corner.
-
Kyoto Joe Inc. sells earnings forecasts for Japanese securities. Its credit terms are 2/10, net 30. Based on experience, 65 percent of all customers will take the discount. a. What is the average...
-
Lipman Inc. has an ACP of 39 days. Its average daily investment in receivables is $47,500. What are annual credit sales? What is the receivables turnover?
-
Salt and ice are stirred together to give a mixture to freeze ice cream. The temperature of the mixture is - 20.0C. What is this temperature in degrees Fahrenheit?
-
Use the following information to answer the next question. The driver of a vehicle travelling with a speed of 19.4 m/s approaches an intersection. The driver notices the colour of the traffic light...
-
12. Kelly catches the football at the corner of his goal line and the East sideline at the South end of the stadium. He runs the ball to his 40 yard line before being tackled by the opposing team's...
-
Force and Energy (Work Done)??? Below please find an equation of attractive force for a particle: F(r) = -Br where a = 7.3 F(x) D Press Esc to exit full screen xi This area is the work done 2X4 1, p=...
-
Q1) If 0,60, 0 40, and m = string 1 (7):( g = 9.8 m/s) a) 20.3 N b) 28.4 N = 5 kg, determine the tension in c) 38.1 N 30.5 N 18 T
-
QUESTION 4 We can make a uniform Electric field by spreading opposite charges on large-Area metal plates that aren't very far apart, like an Oreo. Suppose the two plates are 0.200[m]x0.200[m], set...
-
This case is based on your Birth Day (say, PQ) and Birth Month (say, RS). You are starting a firm with a capital equal to PQRS + 1 crore. Suppose, you are having a date of birth as per official...
-
The population of Detroit, Michigan, decreased from 1,027,974 in 1990 to 688,701 in 2013 (Source: U.S. Census Bureau). Find the average rate of change in the population of Detroit, Michigan, over the...
-
Sunset Boards is a small company that manufactures and sells surfboards in Malibu. Tad Marks, the founder of the company, is in charge of the design and sale of the surfboards, but his background is...
-
SDJ, Inc., has net working capital of $1,730, current liabilities of $5,140, and inventory of $2,170. What is the current ratio? What is the quick ratio?
-
Rainbow Company has a debt-equity ratio of .95. Return on assets is 7.5 percent, and total equity is $735,000. What is the equity multiplier? Return on equity? Net income?
-
Match the statements to the protocols * faster more reliable used for sending data TCP UDP both
-
1. Should managers try to maximize market value of equity or to maximize the accounting value of equity in the balance sheet? Why? 2. What is your understanding of the relationship between risk and...
-
How much risk is appropriate for a government-run annuity system? Is there an appropriate risk-return calculation to be made? Is Social Security risk free? What about political risk?
Study smarter with the SolutionInn App