Multiple Choice
You point out that the nominal cost of not taking the discount and paying on Day 30 is approximately 37%. But since your firm is not taking discounts and is paying on Day 20, what is the effective annual cost (not the nominal cost) of your firm's current practice, using a 365-day year?
A) 60.3%
B) 63.5%
C) 66.7%
D) 70.0%
Correct Answer:
Verified
Correct Answer:
Verified
Q7: Gross working capital simply refers to current
Q11: Discount loans are usually provided for terms
Q15: Since depreciation is a noncash charge,it neither
Q20: If a firm is offered credit terms
Q32: Your company has been offered credit terms
Q50: Schoof Inc.expects to have sales of $30,000
Q91: The effect of compensating balances is to
Q104: A firm needs $45,000 to purchase inventory.The
Q105: Which of the following methods can be
Q108: You were recently hired as CFO to