a) Explain the significance of financing with accounts payable. b) Explain (including computations) the rationale of taking a cash discount, such as 2/15, n/40. c) Additionally, determine the approximate balance of accounts payable, if a company stretches its payables to 60 days and on average, they make purchases of $1,000,000 per day from their vendors. d) Explain what the stretching accomplishes if the vendors should be paid in 40 days

a) Explain the significance of financing with accounts payable. b) Explain (including computations) the rationale of taking a cash discount, such as 2/15, n/40. c) Additionally, determine the approximate balance of accounts payable, if a company stretches its payables to 60 days and on average, they make purchases of $1,000,000 per day from their vendors. d) Explain what the stretching accomplishes if the vendors should be paid in 40 days

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter17: The Management Of Cash And Marketable Securities

Section: Chapter Questions

Problem 2P

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