Company X sells on a 5/24, net 53, basis. Customer Y buys goods with an invoice of $860 a. How much can Y deduct from th

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Company X Sells On A 5 24 Net 53 Basis Customer Y Buys Goods With An Invoice Of 860 A How Much Can Y Deduct From Th 1 (26.57 KiB) Viewed 34 times

Company X Sells On A 5 24 Net 53 Basis Customer Y Buys Goods With An Invoice Of 860 A How Much Can Y Deduct From Th 2 (44.9 KiB) Viewed 34 times

Company X sells on a 5/24, net 53, basis. Customer Y buys goods with an invoice of $860 a. How much can Y deduct from the bill if it pays on day 24? (Round your answer to 1 decimal place.) Discount b. How many extra days of credit can Y receive if it passes up the cash discount? (Round your answer to the nearest whole.) Extra days of credit c. What is the effective annual rate of interest if Y pays on the due date rather than day 24? (Round your answer to 2 decimal places.) Effective annual rate of interest

Locust Software sells computer training packages to its business customers at a price of $92. The cost of production (in present value terms) is $86. Locust sells its packages on terms of net 30 and estimates that about 11% of all orders will be uncollectible. An order comes in for 22 units. The interest rate is 0.9% per month a. Should the firm extend credit if this is a one-time order? The sale will not be made unless credit is extended The firm (Click to select) 9 extend credit. b. What is the break-even probability of collection? (Round your answer to 1 decimal place.) Break-even probability c. Now suppose that if a customer pays this month's bill, it will place an identical order in each month indefinitely and can be safely assumed to pose no risk of default Should credit be extended? (Click to select) d. What is the break-even probability of collection in the repeat-sales case? (Round your answer to 2 decimal places.) Break-even probability