Poultry Pete's regularly purchases laying hens. The terms of payment are 3/15 net 60. Pete is...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Poultry Pete's regularly purchases laying hens. The terms of payment are 3/15 net 60. Pete is not sure they will have the $50,000 to take advantage of the discount so he has instructed his CFO to investigate different options for borrowing the $50,000. The CFO has a list of three lenders with terms as follows: • Barred Rock Lending will lend money with a 45 day simple interest loan. The loan will charge interest of $1500. • Leghorn Financing offers a loan with a 10% compensating balance and charges interest at 15% simple. • Wellsummer Savings and Loan has a line of credit with an interest rate of 10% simple. There is also a commitment fee of 1% of the loan balance. a. What is the cost of not taking advantage of the discount?(3) b. Find the cost of each 45 day loan/line of credit. (9) Poultry Pete's regularly purchases laying hens. The terms of payment are 3/15 net 60. Pete is not sure they will have the $50,000 to take advantage of the discount so he has instructed his CFO to investigate different options for borrowing the $50,000. The CFO has a list of three lenders with terms as follows: • Barred Rock Lending will lend money with a 45 day simple interest loan. The loan will charge interest of $1500. • Leghorn Financing offers a loan with a 10% compensating balance and charges interest at 15% simple. • Wellsummer Savings and Loan has a line of credit with an interest rate of 10% simple. There is also a commitment fee of 1% of the loan balance. a. What is the cost of not taking advantage of the discount?(3) b. Find the cost of each 45 day loan/line of credit. (9)
Expert Answer:
Answer rating: 100% (QA)
a What is the cost of not taking advantage of the discount 3 ANS WER The cost of not taking a... View the full answer
Related Book For
Project Management A Managerial Approach
ISBN: 978-0470226216
7th Edition
Authors: Jack R. Meredith, Samuel J. Mantel,
Posted Date:
Students also viewed these general management questions
-
The terms of payment for $3245 invoice, dated October 25th, are 1/15, n/45. What amount will settle the invoice on November 10th.
-
The terms of payment on an invoice for $2835.49 are 2/15, n/45. The balance owed after a payment within the discount period is $1135.49. What was the amount of the payment?
-
The terms of payment on an invoice are 3/10, n/90. What are the simple and effective annualized rates of return earned by taking the cash discount on the last day of the discount period instead of...
-
Are there accomplishments for which you individually receive credit which others helped you accomplish?
-
Domer Corporation is preparing to issue a relatively small amount of securities and does not want to go to the trouble and expense of filing a registration statement with the SEC. Company officials...
-
According to the Insurance Information Institute, in 2016 there was a 13.3% probability that an automobile theft in the United States would be cleared by arrests. If an automobile theft case from...
-
Determine the number and roof placement of \(10 \mathrm{ft} \times 4 \mathrm{ft}\) skylights needed for a \(50 \mathrm{ft} \times\) \(50 \mathrm{ft} \times 10 \mathrm{ft}\) high office when the...
-
For each of the following independent situations relating to the audit of ICFR, indicate the reason for and the type of audit report you would issue. a. During the audit of Wood Pharmaceuticals, you...
-
1) The December 31, 2024, balance sheet of Garcia Company included the following: Common stock, 20 million shares outstanding at $1 par Paid-in capital-excess of par Retained earnings $20,000,000...
-
Raleigh Medical Clinic is considering acquiring 2 new ultrasound machines for $300,000. The clinic estimates that the machines will have an economic life of 4 years after which they will have zero...
-
Investment income is offset with this related expense. During this transaction, you can exclude the first $250,000 ($500,000 for married taxpayers) of gain on sale. This term refers to an asset sold...
-
In the Bramble Company, there are 15300 units in beginning Work in Process Inventory, 29900 units started into production, and 7200 units in ending Work in Process Inventory 60% completed. How many...
-
In 2024, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2026. Information related to the contract is...
-
During 2024, its first year of operations, Baginski Steel Corporation reported a net operating loss of $450,000 for financial reporting and tax purposes. During 2025, Baginski reported income of...
-
a. Tropical View had a January 1 beginning balance in its Prepaid Rent account of $2,000. During the year the company made payments for prepaid rent of $800. At the end of the year, December 31, the...
-
Braverman Company has two manufacturing departments-Finishing and Fabrication. The predetermined overhead rates in Finishing and Fabrication are $26.00 per direct labor-hour and 120% of direct...
-
Choose two developed countries and two developing countries and discuss the trend of the equity market in each country covering a recent period for at least 5 years. Use data to support your...
-
Cassandra Casey operates the Futuristic Antique Store. She maintains subsidiary ledgers for accounts payable and accounts receivable. She presents you with the following information for October 2019:...
-
Which of the four examples of conflict resolution is the best example, in your opinion, of effective resolution? Why?
-
Discuss why there are trade-offs among the three prime objectives of project management.
-
Find the schedule and cost variances for a project that has an actual cost at month 22 of $540,000, a scheduled cost of $523,000, and an earned value of $535,000.
-
The spectral density of a random signal is given by \[S(f)= \begin{cases}0.0001 \mathrm{~m}^{2} / \text { cycle } / \mathrm{s}, & 10 \mathrm{~Hz} \leq f \leq 1000 \mathrm{~Hz} \\ 0, & \text {...
-
Fill in the Blank. Univariate distributions describe the probability distributions of __________ random variables.
-
What is a marginal density function?
Study smarter with the SolutionInn App