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Question

$6.00 cpht 16

From Business: Finance
Closed, but you can still post tutorials
Due on May. 31, 2012
Asked on May. 29, 2012 at 08:41:26AM

Asked by :

Krissieb
Rating :No Rating
Questions Asked: 10
Tutorials Posted: 0

A supplier is offering your firm a cash discount of 2 % if purchases are paid for within ten days; otherwise the bill is due at the end of 60days. Would you recommend borrowing the from the bank at the 10% annual interest rate to take advantage of the cash discount offer, explain your answer

Assume that your have been offered cash discounts on merchandise that can be purchased from either of two suppliers. Supplier A offers a trade credit terms of 3/20, net 70 while supplier B offers 4/15 net 80. What is the approximate effective cost of missing the cash discounts from each supplier? If you could not take advantage of either cash discount offer, which supplier would you select?

Bank A offers loans with a 10% stated annual rate and a 10 % compensation balance. You wish to obtain 250,000 in a six month loan.

How much mush you borrow to obtain $250,000 in usable funds? Assume you currently do not have any funds on deposit at the bank,. What is the effective annual rate of 6 month loan?

How much mush you borrow to obtain $250,000 in usable funds if you currently have $10,000 on deposit at the bank? What is the effective annual rate of a 6 month loan?

What if you have 30,000 in deposit at the bank?

What is the effective annual rate on a 6 month loan?