Answered

Get expert insights and community support for your questions on IDNLearn.com. Our Q&A platform offers reliable and thorough answers to ensure you have the information you need to succeed in any situation.

Quail Company's suppliers offer terms of 2/10, net 35. Using a 360-day year, what is the approximate cost of foregoing the discounts

Sagot :

Answer:

0.29

Explanation:

The computation of the  approximate cost of foregoing the discounts is shown below:

Here we assume the balance to be $100

Now 2/10, net 35 means that if the person paid the amount within 10 days so he or she is eligible for the payment

So,

= $100 × (100 - 0.02)

= $98

The $98 should be paid in 10 days

or $100 for 35 days

So overall the $2 for borrowing and $98 for 25 days i.e. (35 - 10)

Now the annual percentage is

= $2 ÷ $98 × 360 days ÷ 25 days

= 0.29

Your participation means a lot to us. Keep sharing information and solutions. This community grows thanks to the amazing contributions from members like you. Thank you for visiting IDNLearn.com. We’re here to provide accurate and reliable answers, so visit us again soon.