2.5/5 net 50 to a customer that has agreed to immediately purchase 500 units at a sales price per unit of $100. variable costs are $65 per unit
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a seller has offered credit terms of 2.5/5 net 50 to a customer that has agreed to immediately purchase 500 units at a sales price per unit of $100. variable costs are $65 per unit and involve an immediate
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- Assume all sales are one-time credit sales with a probability of collection of 96 percent. The variable cost per unit is $1.67, the sales price per unit is $4.99, and the monthly interest rate is 1.35 percent. What is the NPV of a credit sale of one item? $3.18 O $2.87 O $3.38 O $2.92 O $3.06ABC is deciding if credit should be extended to its customers. It has determined that there is a 95% probability that it would collect the full payment from a credit sale in one month. The receivable is financed at an APR of 7.10%. On credit sales of $3,000 per unit, the present value of costs are expected to be 84.50% of the sales price. What is the present value of the expected profit on the sale of each unit? Explain with all steps a.-$16.76 b.-$166.76 c.$126.06 d.$254.90 e.$298.24What is the break-even probability in the following case? A customer wishes to purchase a $2,000 item that has been marked up to 50% over cost. Assume all cash flows are discounted to present value and there is no chance of subsequent sales. a. 55.67% b. 77.67% c. 66.67% d. 88.67%
- What is the approximate annual cost of foregoing the cash discount if the credit term is 2/15, net 40 and the company pays end of 50 days? Use 360 days a year. Group of answer choices 28.80 percent 29.39 percent 20.57 percent 20.99 percentMemphis Metro just made a $75,000 purchase from a supplier, subject to the extension of suitable trade credit terms. Using a discount rate of 7%, calculate the present value of this cash outflow assuming trade credit terms of a) 30 days b) 45 days c) 60 days d) 90 daysIllustration: A company sells $50,000 of goods with the terms net/30. The receivable is immediately factored with a 3% factor fee, 10% interest, and a reserve of 8%. How much does the selling firm immediately receive from the factor?
- NPV(Net Present Value) with discount rate is 6% for this period and cashflow as followed. Period 0, Cashflow ($150,000) Period 1, Cashflow $70,000 Period 2, Cashflow $80,000 Net present value is 71,198. Payback period is 2 years. Please elaborate in detail the obvious problem with using the payback method (Profit Index, NPV, IRR & Time Value Of Money).Your firm expects to receive a $20,000 payment from a supplier in 25 days. Calculate the increase in the cash inflow's present value if the cash inflow can be collected 5 days sooner. Assume an annual discount rate of 10%. A. -$56.18 b. $27.07 c. $19,9972.64 d. $18,587.253.-DO IT IN EXCEL, AND SHOW THE FORMULASThe main supplier of Productos Adiós, S.A., offers you the option of a Cash Discount of 1.5% if you pay before two weeks. You should seriously evaluate this alternative to try to be more efficient in your accounts payable. You can use the direct lending facility that charges interest in advance, at a rate of 14.5% and an origination fee of 1%.This supplier's billing is $450,000 for a one-month term.What is the difference between the supplier's discount and the sum of commission and interest on the financing? A) $476.39 B) None of the above C) $660.87 D) $2,904.26 (Choose one option)
- 3.-DO IT IN EXCEL, AND SHOW THE FORMULASThe main supplier of Productos Adiós, S.A., offers you the option of a Cash Discount of 1.5% if you pay before two weeks. You should seriously evaluate this alternative to try to be more efficient in your accounts payable. You can use the direct lending facility that charges interest in advance, at a rate of 14.5% and an origination fee of 1%.This supplier's billing is $450,000 for a one-month term.What is the difference between the supplier's discount and the sum of commission and interest on the financing? A) $476.39 B) None of the above C) $660.87 D) $2,904.26An FI has estimated the following annual costs for its demand deposits: management cost per account = $150, average account size = $1600, average number of cheques processed per account per month = 75, cost of clearing a cheque = $0.10, fees charged to customer per cheque = $0.05, and average fee charged per customer per month = $15. (a) What is the implicit interest cost of demand deposits for the FI? (b) If the FI has to keep an average of 8 per cent of demand deposits as required reserves with the RBA paying no interest, what is the implicit interest cost of demand deposits for the FI? (c) What should be the per-cheque fee charged to customers to reduce the implicit interest costs to 3 per cent? Ignore the reserve requirements.Find the profitability index for Oman Air conditioner Company if the initial investment is 4000 OMR and the cash Inflows are as follows: Year 1 =1350 OMR; Year 2 =1400 OMR; Year 3=1450 OMR and Year 4=1500 OMR. Use discount rate as 5%. Select one: a. None b. 1.69 c. 1.83 d. 1.26 e. 1.48