Sunday
April 20, 2014

Homework Help: Finance

Posted by Alison on Saturday, April 14, 2012 at 3:15pm.

Brand Advertising is offered a 3/10 net 40 trade discount by its supplier. In the past Brand has been able to ger away with paying for supplies on credit in 60 days. Since it doesn't have money on hand to take advantage of the discount, it tries to negotiate a loan with Portland State Bank. The amount of $400,000 with a 12% compensating balance and a $6,200 interest charge has been negotiated for the month of May . Brand already maintains a $16,250 balance at the bank. Compute the effective rate of interest on the loan, and the cost of not taking the discount. Should Brand take advantage of the cash discount?

Answer this Question

First Name:
School Subject:
Answer:

Related Questions

Accounting - Trade credit discount. Compute the annual approximate interest ...
Probabilities - A brand name has a 40% recognition rate. If the owner of the ...
Accounting - Cruise industries purchased $10,800 of merchandise on February 1, ...
Advertising--VIdeo - I have to find two video ads on the net. I want them to be ...
Finance - How to compute the cost of cash flow 2/10, net 40?
Math - Fantasia Florist Shop purchases an order of imported roses with a list ...
marketing - what are the pricing issues in the product category? for the brand ...
^^Brand Extension^^ - wat does brand extension mean? cud u give me an example? ...
science - please tell me if you agree with the following: Which Brand of popcorn...
math help1answer - 4. Which of the following has the lowest unit price? Brand A...

Search
Members