Problem $26-13$

"Simple Simon$$s Bakery purchases supplies on terms of $1/10,$ Net $25.$ If Simple Simon$$s chooses to take the discount offered, it must obtain a bank loan to meet its short$-$term financing needs. A local bank has quoted Simple Simon$$s owner an interest rate of $12\%$ on borrowed funds. Should Simple Simon$$s enter the loan agreement with the bank and begin taking the discount?

$$omplete the steps below using cell references to given data or previous calculations. In some cases, a simple cell reference is all you need. To copy$/$paste a formula across a row or down a column, an absolute cell reference or a mixed cell reference may be preferred. If a specific Excel function is to be used, the directions will specify the use of that function. Do not type in numerical data into a cell or function. Instead, make a reference to the cell in which the data is found. Make your computations only in the blue cells highlighted below. In all cases, unless otherwise directed, use the earliest appearance of the data in your formulas, usually the Given Data section."

Terms $1\%10$ net $25$

Comparable loan $12\%$

Days in a year $365$

Additional days $15$

Interest rate $($additional days$)$

Cost of payables

Simple Simon take the loan.

Start Excel $$ completed.

In cell D$10,$ by using cell references, calculate the additional days of credit $(1$ pt$.).$

In cell D$11,$ by using cell references, calculate the implicit interest rate charged for the additional days of credit $(1$ pt$.).$

In cell D$12,$ by using cell references, calculate the cost of payables $(1$ pt$.).$

In cell C$14,$ select from the dropdown whether Simple Simon should take the loan $(1$ pt$.).$