10. SM Supermarket purchases P4,562,500 in goods over a 1-year period from its sole supplier. The supplier offers trade credit under the following terms: 2/15, net 50 days. If Hayes chooses to pay on time but not to take the discount, what is the average level of the firm's accounts payable, and what is the effective annual cost of its trade credit? (Assume a 365-day year.) A. P208,333; 17.81% D. P416,667; 27.43% B. P416,667; 17.54% E. P625,000; 23.45% C. P625,000; 17.54%

10. SM Supermarket purchases P4,562,500 in goods over a 1-year period from its sole supplier. The supplier offers trade credit under the following terms: 2/15, net 50 days. If Hayes chooses to pay on time but not to take the discount, what is the average level of the firm's accounts payable, and what is the effective annual cost of its trade credit? (Assume a 365-day year.) A. P208,333; 17.81% D. P416,667; 27.43% B. P416,667; 17.54% E. P625,000; 23.45% C. P625,000; 17.54%

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Description: Show the solution in good accounting form 10. SM Supermarket purchases P4,562,500 in goods over a 1-year period from its sole supplier. The supplier offers tradecredit under the following terms: 2/15, net 50 days. If Hayes chooses to pay on time but

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 6P

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Show the solution in good accounting form

10. SM Supermarket purchases P4,562,500 in goods over a 1-year period from its sole supplier. The supplier offers trade
credit under the following terms: 2/15, net 50 days. If Hayes chooses to pay on time but not to take the discount,
what is the average level of the firm's accounts payable, and what is the effective annual cost of its trade credit?
(Assume a 365-day year.)
A. P208,333; 17.81% D. P416,667; 27.43%
B. P416,667; 17.54% E. P625,000; 23.45%
C. P625,000; 17.54%

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