1. Ford Motor Co. is considering alternate methods of accounting for the cash discounts it takes when paying suppliers promptly. One method suggested was to report these discounts as financial income when payments are made. Comment on the propriety of this approach.
2. Joanne and Ed Greenwood built a new barn with an attached arena. To finance the loan, they paid $1,344 interest on $40,700 at 5%. What was the time, using exact interest?