Ms Fiona is buying feed for her animals from a supplier. The supplier is normally granting...

 

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Ms Fiona is buying feed for her animals from a supplier. The supplier is normally granting credit for 90 days. He is now prepared to give a 1,5% discount if the account is settled within seven days. Ms Fiona is paying interest on her overdraft of 12% per annum. Advise Ms Fiona as to whether she should make use of the offer. (10) TASK 2 Use the following information and calculate the amount of money available for this farmer to repay debt with. Gross production value R890 000, Existing debt repayment R65 000, Non-farm income R 560 000, Interest on bank overdraft R63 000, Living expenses R186 000, Interest and capital redemption on farm R52 000, Income tax R29 000, Production marketing and administrative costs R96 000, Interest and capital redemption on bakkie and tractor R88 000. (10) Ms Fiona is buying feed for her animals from a supplier. The supplier is normally granting credit for 90 days. He is now prepared to give a 1,5% discount if the account is settled within seven days. Ms Fiona is paying interest on her overdraft of 12% per annum. Advise Ms Fiona as to whether she should make use of the offer. (10) TASK 2 Use the following information and calculate the amount of money available for this farmer to repay debt with. Gross production value R890 000, Existing debt repayment R65 000, Non-farm income R 560 000, Interest on bank overdraft R63 000, Living expenses R186 000, Interest and capital redemption on farm R52 000, Income tax R29 000, Production marketing and administrative costs R96 000, Interest and capital redemption on bakkie and tractor R88 000. (10)

Answer rating: 100% (QA)

Part 1 Answer Yes Ms Fiona should make use of the offer By taking the 15 discount she wi... View the full answer