PRIN.OF CORPORATE FINANCE
13th Edition
ISBN: 9781260013900
Author: BREALEY
Publisher: RENT MCG
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Question
Chapter 30, Problem 9PS
Summary Introduction
To determine: Rate of interest when 2/30 and net 60.
Summary Introduction
To discuss: Rate of interest when 2/5, EOM, net 30.
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Students have asked these similar questions
What is a credit card’s grace period?
A) it is the amount of time after a purchase and before it starts accruing interest
B) it is a period during which the card’s interest rate cannot change
C) it is the amount of time between the bill being issued and your payment being due
D) it is the period during which you can return the card and not incur any fees
As a company accounts payable manager, which of the following credit terms are most likely to entice you to take the cash discount?
A. 2/10 net 90
B. 1/10 net 45
C. 2/10 net 60
D. 1/10 net 30
This module discusses discounts given out to customers based on payment terms, such as 2/10, n/30. :
What would the credit terms 3/15, n/45 stand for?
Explain why it is important for a company to keep track of how much money in discounts is given out? What account is used to track discounts?
From a business owner's point of view, what are the advantages of allowing discounts?
From a business owner's point of view, what are the disadvantages of allowing discounts?
Chapter 30 Solutions
PRIN.OF CORPORATE FINANCE
Ch. 30 - Prob. 1PSCh. 30 - Components of working capital True or false? a....Ch. 30 - Inventory True or false? a. Just-in-time inventory...Ch. 30 - Inventory What are the trade-offs involved in the...Ch. 30 - Prob. 5PSCh. 30 - Prob. 6PSCh. 30 - Prob. 7PSCh. 30 - Prob. 8PSCh. 30 - Prob. 9PSCh. 30 - Credit terms Phoenix Lambert currently sells its...
Ch. 30 - Prob. 11PSCh. 30 - Prob. 12PSCh. 30 - Prob. 13PSCh. 30 - Prob. 14PSCh. 30 - Prob. 15PSCh. 30 - Credit policy How should your willingness to grant...Ch. 30 - Prob. 17PSCh. 30 - Prob. 18PSCh. 30 - Prob. 19PSCh. 30 - Prob. 20PSCh. 30 - Cash management Complete the passage that follows...Ch. 30 - Prob. 22PSCh. 30 - Prob. 23PSCh. 30 - Prob. 24PSCh. 30 - Prob. 25PSCh. 30 - Prob. 26PSCh. 30 - Prob. 27PSCh. 30 - Prob. 28PSCh. 30 - Prob. 29PSCh. 30 - Prob. 30PSCh. 30 - Prob. 31PSCh. 30 - Prob. 32PSCh. 30 - Prob. 34PSCh. 30 - Prob. 35PSCh. 30 - Prob. 36PSCh. 30 - After-tax yields Suppose you are a wealthy...Ch. 30 - Prob. 38PSCh. 30 - Prob. 39PS
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Similar questions
- Write a note on cash discounts.arrow_forwardPromissory notes can be used in which of the following cases? a. Lending money b. All the given options c. Borrowing money d. Credit purchases or credit sales Clear my choicearrow_forward6. Open account credit provides a debtor with a predetermined line of credit and a flexible payback period. Which of the following is an example of open account credit? i. Personal Loan ii. Overdraft i. Charge card iv. Education loan A. i and ii B. i,i and ii C. ii and ii D. i,ii,i and ivarrow_forward
- 3. Discuss briefly how are customer’s note and own notes are discounted?arrow_forwardThe interest rate that banks provide to the customers for the savings deposit account is more than current deposit account but less than: a. Overdraft account b. Savings deposit account c. Flexible account d. Fixed deposit accountarrow_forwardWhich of the following would not result in a reduction of the amount invoiced to a customer when a credit sale is made? A. Quantity discount B. Cash-free discount C. Sales discountD. Two-for-one specialarrow_forward
- 21. Open account credit is a credit facility offered by retailers or financial institutions which allow the customers to borrow up a pre-determined amount to pay for purchases. Which of the following is/are categorized as open account credit? i. Credit card ii. Personal loan iii. Car loan iv. Overdraftarrow_forwardWhat types of accounts are increased with a credit?arrow_forwardAccounts receivable are customer payments. (increased/decreased) by credit sales and are Need help? Review these concept resources. Read About the Concept increased decreased) byarrow_forward
- Thinking about various payment terms for Accounts Payable, do you feel it is always valuable for a company to offer early payment discounts, and does this answer change based on the going prime rate?arrow_forward________________1. This is the criterion to determine whether the transfer is accounted for as borrowing._______________ 2. What account to debit if the company pays a delinquent notes receivable that was previously discounted._______________ 3. What account to credit if the customer’s notes receivable become delinquent and was not previously discounted.arrow_forwardThe type of cash discount where the discount period is counted from the date of invoice is ___. a. Ordinary dating b. Credit period c. Receipt of goods d. End of the montharrow_forward
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