5. Three suppliers of baseball equipment offer different credit terms to City Sports. Burns Co, offers terms of 1.5/15, net 30. Cook Enterprise offers terms of 1/10, net 30. Platt Inc, offers terms of 2/10, net 60. City Sports would have to borrow from a bank at an annual rate of 10% in order to take any cash discount. Which one of the following would be the most attractive for City Sports? 1. Purchase from Burns and pay in 30 days 2. Purchase from Burns, pay in 15 days, and borrow any money needed from the bank. 3. Purchase from Cook, pay in 10 days, and borrow any money needed from the bank. 4. Purchase from, Platt, pay in 10 days, and borrow any money needed from the bank.
5. Three suppliers of baseball equipment offer different credit terms to City Sports. Burns Co, offers terms of 1.5/15, net 30. Cook Enterprise offers terms of 1/10, net 30. Platt Inc, offers terms of 2/10, net 60. City Sports would have to borrow from a bank at an annual rate of 10% in order to take any cash discount. Which one of the following would be the most attractive for City Sports? 1. Purchase from Burns and pay in 30 days 2. Purchase from Burns, pay in 15 days, and borrow any money needed from the bank. 3. Purchase from Cook, pay in 10 days, and borrow any money needed from the bank. 4. Purchase from, Platt, pay in 10 days, and borrow any money needed from the bank.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:5. Three suppliers of baseball equipment
offer different credit terms to City Sports.
Burns Co, offers terms of 1.5/15, net 30.
Cook Enterprise offers terms of 1/10, net
30. Platt Inc, offers terms of 2/10, net 60.
City Sports would have to borrow from a
bank at an annual rate of 10% in order to
take any cash discount. Which one of the
following would be the most attractive for
City Sports?
1. Purchase from Burns and pay in 30
days
2. Purchase from Burns, pay in 15 days,
and borrow any money needed from
the bank.
3. Purchase from Cook, pay in 10 days,
and borrow any money needed from
the bank.
4. Purchase from, Platt, pay in 10 days,
and borrow any money needed from
the bank.
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