Cowboy Construction buys materials on account from Highes. Highes offers a 2 percent discount for invoices paid within 10 days. Full payment is due within 90 days. But Cowboy Construction routinely pays its invoices on the ninetieth day. If Cowboy’s effective tax rate is 42 percent, what is the cost of capital for accounts payable in percentage? Excel calculation

Q: A corporation decides to deposit a fixed payment per quarter into an account earning 9% interest per…

A: A sinking fund can be referred to as a saving account in which a fixed amount is deposited after the…

Q: The company has a 10% interest bearing, promissory note of 50,000, payable after 5 years. Sales…

A: The financial leverage is the ratio that helps in measuring the dependency of the entity on debt…

Q: A motor corporation sells cars for P dollars, 40% of which must be paid in cash. The unpaid balance…

A: Time value of money- It is based on the concept that money earned today is worth more than similar…

Q: Suppose your firm receives a $4.93 million order on the last day of the year. You fill the order…

A: Debit what comes in, Credit what goes out Debit all Assets, Credit all Liabilities Debit all income…

Q: Commercial paper is usually sold at a discount. Mucus Corporation has just sold an issue of 90-day…

A: When the effects of compounding over time are considered, an effective annual interest rate is the…

Q: A pottery factory purchases a continuous belt conveyor kiln for $68,000.  A 6.3% APR loan with…

A: The formula to calculate loan term is given below:

Q: Ivanhoe Company earns 9% on an investment that pays back $93,000 at the end of each of the next 9…

A: Present value (PV) is the current value of a future sum of money or stream of cash flows given a…

Q: BRCC is evaluating an option for funding its working capital during the next year. The company plans…

A: in this we have to calculate the interest and add to that to get required value.

Q: DMT Farms harvests crops in roughly 90-day cycles based on a 360-day year. The firm receives payment…

A: Face Value = Proceeds / [ 1 - ( Discount rate * Period / 360 ) ]

Q: Boyd earned $35,000 of cash revenue during Year 1. Required Prepare an income statement and balance…

A: Concept of Working capital finance Bank finance - Credit Line from Bank  Interest Calculation Profit…

Q: A manufacturing company invests at a 3% interest rate in a 100-day treasury bill with a face value…

A: Treasury Bill (T-Bills) are the securities which are issued by federal government through money…

Q: Suncoast Boats Inc. estimates that because of seasonal nature of its business, it will borrow…

A: Loan is a contract between two parties the lender and the borrower of the finance. This contract of…

Q: Sparkling Water, Incorporated, expects to sell 3.7 million bottles of drinking water each year in…

A: The present value of a sum of money is its estimated future value as of right now. It may also be…

Q: Ansel Accounting Firm rents an office space for $250,000 per year which is due at the beginning of…

A: Beginning of period payments Rent Payments = 250,000 per year Time Period = 5 years Hurdle Rate =…

Q: 1) Wontaby Ltd. is extending its credit terms from 45 to 60 days. Sales are expected to increase…

A: Question OneBecause of increase in the credit terms, company's accounts receivables increases where…

Q: Wolfson Corporation has decided to purchase a new machine that costs $4 million. The machine will be…

A: NAL is the net present value of entering into a lease instead of buying an asset using borrowed…

Q: A company buys 2mm items for $3 each and sells 1mm of those items during a year for $6 each.…

A: EBITDA: EBITDA is an acronym of earnings before interest, taxes, depreciation, and amortisation, is…

Q: A small business received a five-year $1,000,000 loan at a subsidized rate of 3 percent per year.…

A: NPV is also known as Net Present Value. It is a capital budgeting technique which helps in decision…

Q: What is his net cash flow (surplus or deficit) for the year? Enter negative values with minus sign.…

A: Information Provided: Earnings = $56,000 Taxes = 14% of gross income Fixed exp = $2000 per month…

Q: Automotive Excellence Inc. borrowed $16,000.00 on April 16 with an interest rate of 4.9% per annum.…

A: An interest rate is the cost of borrowing money or the return on investment for lending money,…

Q: One retailer charges $1038 for a certain computer. A firm of tax accountants buys 7 of these…

A: Cost per computer: $1038Number of computers purchased: 7Down payment: $1300Interest rate: 12%Number…

Q: tax liability

A: Income tax is compulsory and pinches any entity’s picket. However, it allows a myriad of deductions…

Q: A firm takes out a $300,000 loan to purchase an asset. It makes yearly payments of $30,000 plus…

A: Before tax cash flow is calculated in real asset property. It is the net income after subtracting…

Q: Automotive Excellence Inc. borrowed $17,000.00 on March 4 with an interest rate of 8.6% per annum.…

A: The objective of the question is to calculate the final payment made by Automotive Excellence Inc.…

Q: It is December 31. Last year, Campbell Construction had sales of $80,000,000, and it forecasts that…

A: Following formula will be useful here. 1. Percentage change in EBIT = Revised EBIT - Original…

Q: Stinson Corporation borrowed $85,000 at 8% compounded quarterly to buy a warehouse. Monthly payments…

A: Here, To Find: Amortization schedule showing last 2 payments =? Total amount paid to settle the…

Q: Cost of commercial paper Better Effort Corporation sold an issue of 106-day commercial paper with a…

A: Commercial Paper = 106Face Value = $1.3millionProceeds = $1285230Period = 365

Q: Khoury Home carried out the following operations during the 2nd quarter of the year 2020: Sales $…

A: Solution: Output VAT on sales = $250,000*11% = $27,500 Input VAT on purchases = $80,000*11% = $8,800

Q: 6. Holcim Cement plans to buy equipment that costs $560,000 to expand its production in 6 years. If…

A: There is need of planning for the future and if done on time with proper planning than it will have…

Q: if Jayne company gets a discount loan at a 12 percent interest rate.  They borrow $100,000 for one…

A: Since you have asked multiple questions, we will solve only one( i will be solving the 2nd question…

Q: ABC Date Enterprise takes out a $40,000 loen to finance the purchase of new physical capital. It…

A: Data given: Loan amount  (L) = $40,000 n= 1 year i= 8% Corporate tax  rate= 40%

Q: Tokyo Corporation purchases P1,500 in raw material each month to support sales of P2,500 that occur…

A: Cash flows are the cash generated from the operation of the business organisation. In other words,…

Q: Crafty Inc. borrowed $10,000 with a five-year 11.26% annual interest rate on 10/1/20X1. On their…

A: Borrowing is a kind or form of loan being taken in business. Interest expense needs to be incurred…

Q: uy a truck for $25,200.  You must also pay tax and license fees of $1,700.  You borrow $23,000 at 9%…

A: Vehicles are purchased on the basis of monthly payments and these monthly payments carry the payment…

Q: Last year, Cayman Corporation had sales of $7 million, total variable costs of $2 million, and total…

A: Variable costs are costs which changes with change in activity level. Fixed costs do not change with…

Q: On January 1, Year 1, Brown Co. borrowed cash from First Bank by issuing a $68,500 face value,…

A: Cash Flow Statement - Under Cash Flow, there are three types of activities involved - Operating…

Q: A new piece of equipment costs $500,000, and depreciated according to the 5 year MACRS schedule.…

A: In the given question, we have to calculate the net cash inflow for which we have been given annual…

Q: Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank…

A: Given: Loan taken on Sep 20=$680000Annual interest rate =3.4% Payable in =8 months i.e. on May 20

Q: Brady and Sons uses accounts receivable as collateral to borrow money for operations and payroll…

A: Interest is the amount of charge that is being levied on invested amount. It can be simple interest…

Q: What is the effective annual interest rate of this trade credit?

A: Credit term can be defined as the payment period for the credit sale or purchase of goods, which is…