Read each question carefully, make sure to answer all questions are answered and must show your work:

7. For each of the following financial situations, calculate the optimal cash discount percentage (each bullet is a separate answer, solve each bullet)

Cash discount period = 5 days, credit period = 75 days, and annual cost of capital = 15%

Cash discount period = 10 days, credit period = 30 days, and annual cost of capital = 12%

Cash discount period = 10 days, credit posted = 45 days, and annual cost of capital = 18%

Cash discount period = 10 days, credit period = 30 days, and annual cost of capital = 22%

8. If the annualized cost of trade credit is 7.37%, what is the net trade credit period? Assume a discount percentage of 1% for payments received on or before 20 days

A. 50 Days B. 70 days C. 30 days D. 40 days

9. 9. Calculate the present value savings associated with paying on the last day of the discount trade credit period, as compared to the last day of the net trade credit period. Assume a $40,000 purchase is made from a supplier that offers trade credit terms of 2/10 net 30. Also, assume a discount rate of 5%.

A. $39,836.29 B. $39,836.29 C. $689.92 D. $-689.92

10. . If the annualized cost of trade credit is 25.09%, what is the discount trade credit period? Assume a net trade credit period of 60 days and a discount percentage of 3% for early payments.

A. 5 days B. 30 days C. 15 days D. 45 days