Solved: Cost of foregoing the cash discount, Accounting Basics

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Cost of foregoing the cash discount

Question: Syntech is offered credit terms of 2/10, net 40, but decides to forego taking the cash discount and pays on the 45th day. What is Syntech's cost of foregoing the cash discount? [AFC=(Interest Paid/usable funds)(365/maturity(days)]

The four answers that I have are one of the following:

a. 24.83%

b. 21.28%

c. 18.62%

d. none of the above

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Accounting Basics: Cost of foregoing the cash discount

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Solution Preview :

Prepared by a verified Expert

Accounting Basics: Cost of foregoing the cash discount

Reference No:- TGS01740216

Have a Question? (oR Write a Review)

Recent Questions Asked Accounting Basics

Q : Maximum purchase price acceptable

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Q : Cost of foregoing the cash discount

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Solution Preview :

Prepared by a verified Expert

Accounting Basics: Cost of foregoing the cash discount

Reference No:- TGS01740216

Recent Questions Asked Accounting Basics

Q : Maximum purchase price acceptable

Q : Value of a contract

Q : Asset exchanged at a gain

Q : Determine the cost of equity capital for the firm

Q : Cost of foregoing the cash discount

Q : Minimizing the waiting and travel times of employees

Q : Write a linear polynomial for the rent price

Q : Total interests from the investment

Q : Find the open intervals

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