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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%

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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%
Transcribed Image Text: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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