Simmons Corp can borrow from your bank at 18 percent to get a prompt payment discount The terms of the prompt payment discount are 2 5 10, net 75 a Calculate the cost of not taking the prompt payment discount (Use a 360 day year Do not round intermediate calculations Enter your final answer as a pe...

Solution Given SI 1 15 1 11 Effective annual intercest reate 1 discount rate ...

Simmons Corp. can borrow from your bank at 18 percent to get a prompt payment discount. The

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Simmons Corp. can borrow from your bank at 18 percent to get a prompt payment discount. The terms of the prompt payment discount are 2.5/10, net 75.

a.	Calculate the cost of not taking the prompt payment discount. (Use a 360-day year. Do not round intermediate calculations. Enter your final answer as a percentage rounded to 2 decimal places.)

Cost of not taking a prompt payment discount

Should the company borrow the funds?

	Yeah
	No

Related Book For answer-question

Foundations of Financial Management

ISBN: 978-1259194078

15th edition

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen

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Posted Date: May 04, 2023 07:03 AM

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Simmons Corp. can borrow from your bank at 18 percent to get a prompt payment discount. The

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Foundations of Financial Management

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