Answer the questions from the information provided. Answer the following questions from the information provided below:
Posted: Wed Jul 06, 2022 6:28 pm
Answer the questions from the information provided.
Answer the following questions from the information providedbelow:
Bennet Stores intends selling a stove on credit. The sellingprice of the stove is R6 000. The mark-up on the costprice is 50%. Credit terms of 2/10 net 60 were agreed upon. Thecost of capital to Bennet Stores is 15%.
1. Calculate the profit that Bennet Stores would make if theaccount is settled within the discount period.2. Should the customer fail to pay the amount due and the accountis written off after 90 days, how much would be the loss to BennetStores?3. If Umdloti Trader’s required rate of return on equal-riskinvestments is 18%, should the proposed increase in the discountoffered (from 2% to 3%) be made? Show all calculations.
Answer the following questions from the information providedbelow:
Bennet Stores intends selling a stove on credit. The sellingprice of the stove is R6 000. The mark-up on the costprice is 50%. Credit terms of 2/10 net 60 were agreed upon. Thecost of capital to Bennet Stores is 15%.
1. Calculate the profit that Bennet Stores would make if theaccount is settled within the discount period.2. Should the customer fail to pay the amount due and the accountis written off after 90 days, how much would be the loss to BennetStores?3. If Umdloti Trader’s required rate of return on equal-riskinvestments is 18%, should the proposed increase in the discountoffered (from 2% to 3%) be made? Show all calculations.