TERM FINANCING II. Directions: Solve the following 1. Princess trading ordinarily purchases raw materials amounting to Php 200,000 with the terms 2/15, net 30, Princess operates at 360 days a year. Required: 1. Compute the annual nominal cost of trade credit or the cost failing to take the cash discount. 2. Compute the effective annual cost or rate of the trade credit of not taking the cash discount. 3. Will it be beneficial for PRINCESS TRADING to pay within 15 days from the purchase assuming banks are charging 15 % interest on loan.

TERM FINANCING II. Directions: Solve the following 1. Princess trading ordinarily purchases raw materials amounting to Php 200,000 with the terms 2/15, net 30, Princess operates at 360 days a year. Required: 1. Compute the annual nominal cost of trade credit or the cost failing to take the cash discount. 2. Compute the effective annual cost or rate of the trade credit of not taking the cash discount. 3. Will it be beneficial for PRINCESS TRADING to pay within 15 days from the purchase assuming banks are charging 15 % interest on loan.

Name: Topic: short term financingDirections: solve the following (please ans
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Description: Topic: short term financingDirections: solve the following (please answer subpart 1-3) II.T OPIC: SHORT TERM FINANCINGIII.Directions: Solve the following1. Princess trading ordinarily purchases raw materials amounting to Php 200,000 with the terms 2/

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 10MC

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2. A car financing firm offers the following scheme for an entry level Isuzu Mu-X 2021 model: • Selling Price Down Payment Method P1,350,000 25% Payment Term 36 months Monthly Payment P39,639 What nominal rate is applied and what is the effective rate?
3.-DO IT IN EXCEL, AND SHOW THE FORMULASThe main supplier of Productos Adiós, S.A., offers you the option of a Cash Discount of 1.5% if you pay before two weeks. You should seriously evaluate this alternative to try to be more efficient in your accounts payable. You can use the direct lending facility that charges interest in advance, at a rate of 14.5% and an origination fee of 1%.This supplier's billing is $450,000 for a one-month term.What is the difference between the supplier's discount and the sum of commission and interest on the financing? A) $476.39 B) None of the above C) $660.87 D) $2,904.26 (Choose one option)
3.-DO IT IN EXCEL, AND SHOW THE FORMULASThe main supplier of Productos Adiós, S.A., offers you the option of a Cash Discount of 1.5% if you pay before two weeks. You should seriously evaluate this alternative to try to be more efficient in your accounts payable. You can use the direct lending facility that charges interest in advance, at a rate of 14.5% and an origination fee of 1%.This supplier's billing is $450,000 for a one-month term.What is the difference between the supplier's discount and the sum of commission and interest on the financing? A) $476.39 B) None of the above C) $660.87 D) $2,904.26
Problem B: Cost of Trade Credit ABC has a major supplier that offers a credit term of 2/15, n/45. Cash not yet used for payments are generally kept in an account that earns ABC 2.5% per year. Use 360 days in a year. Compute for the following: 1. Simple annual effective cost of paying on 45th day instead of the 15th day. 2. Compounded annual effective cost of paying on 45th day instead of the 15th day. 3. Should ABC pay on the 15th day or 45th day? Topic: Short-term Financing Decisions-Working Capital Management (Cash and Payables) Kindly base the answers on the topic above.
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Bumpas Enterprises purchases $4,562,500 in goods per year from its sole supplier on terms of 4/10, net 65. If the firm chooses to pay on time but does not take the discount, what is the effective annual percentage cost of its non-free trade credit? (Assume a 365-day year.) a. 21.98% b. 27.65% c. 29.49% d. 31.12% e. 28.46%
tme unIount 0I Ict T ccCIvao. Question 6.2: Bank Mysarah provides a financing facility based on the principles Murabahah to the Purchase orderer to Barakah Construction. to purchase specialized equipment to be used for their business project. The financing amounted to OR 500.000 at a constant rate of return of 10% for a period of 5 years. The annual installment payment is OR 150,000. Required : a) Prepare journal entries for Bank Mysarah only for the first year and final year of the contract. b) Present a statement showing the amount of net receivable and murabahah income for the whole duration of the contract. 6.3
8. Sasakyani Company sells to retail auto supply stores on credit terms of 2/10, n/30. Annual credit sales are P300 million and its accounts average 25 days overdue. Determine Sasakkyani's average collection period. Assume 360 days in a year. a. 30 days b. 45 days c. 50 days answer not given 9. Browny sells to retail appliance stores on credit terms of net 30. Annual credit sales is P27.000,000 spread evenly throughout the year and its accounts average 20 days overdue. The firm's variable cost ratio is 0.70. Determine Browny's average investment in receivables. Assume 360 days in a year. a. P1,500,000 b. P2,250,000 c. P 3,750,000 d. cannot be determined from the information provided 10. Marca Leon is planning to change its credit policy. The proposed change is expected to shorten the collection period from 50 days to 30 days, increase the ratio of cash sales to total sales from 20% to 30%, and irallos decrease total sales by 10%. If projected sales for the coming year is P40,000,000,…
A car dealer carries out the following calculations. List price $ 5,368.00 Options $ 1,625.00 Destination charges $ 200.00 Subtotal $ 7,193.00 Tax $ 431.58 Less trade-in $ 2,932.00 Amount to be financed $ 4,692.58 15% interest for 48 months $ 2,815.55 Total $ 7,508.13 MONTHLY PAYMENT $ 156.42 What is the annual percentage rate? (Round your answer to one decimal place.) %
Your firm purchases goods from its supplier on terms of 2.3/14, net 40. a. What is the effective annual cost to your firm if it chooses not to take the discount and makes its payment on day 40?. (Round to one decimal place.) b. What is the effective annual cost to your firm if it chooses not to take the discount and makes its payment on day 50? (Round to one decimal place.)
PT. AAH is currently is selling cooking oil for IDR 15.000/litre. Sales (all on credit) last year were recorded at 2.400.000 unit. Variable cost per unit is IDR 9.000/litre. The firm total fixed cost is IDR. 12.000.000.000. The firm is considering changing its credit policy. Assumption: 1 year = 360 days. PT. AAH initiate cash discount program, changing its credit terms from net 30 to 4/10 net 30. This change is expected to reduce the average collectionperiod from 40 days to 25 days. The sales unit is expected to increase 5% from the current level. PT. AAH estimates 85% of its customer will take the discount. The level of bad debt percentage will be decreasing from 2% to 0.5%. The cost of investment in Account Receivable is 17%. Should PT. AAH change its current account receivable policy?Explain your answer
The trade credit terms obtained from your suppliers (ABC Ltd) is 2/20 net 60. Determine the approximate cost of giving up the trade discount. Assume a 360 day year. Pease answer fast i give you upvote.