Q.1
Compute the cost of not taking the following cash discounts:
a. 2/10, net 40.
b. 2/15, net 30.
c. 2/10, net 45
d. 3/10, net 90
Q.2
Regis Clothiers can borrow from its bank at 17 percent to take cash discount. The terms of the cash discount are 3/19, net 45. Should the firm borrow the funds?
Q.3
Simmons Corp. can borrow from its bank at 17 percent to take a cash discount. The terms of the cash discount are 1.5/10, net 45. Should the firm borrow the funds?