Question

You place an order for 1,600 units of Good X at a unit price of $53. The supplier offers terms of 2/30, net 50. a-1. How long do you have to pay before the account is overdue? a-2. If you take the full period, how much should you remit? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b-1. What is the discount being offered? (Enter your answer as a percent.) b-2. How quickly must you pay to get the discount? b-3. If you do take the discount, how much should you remit? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) c-1. If you don’t take the discount, how much interest are you paying implicitly? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) c-2. How many days’ credit are you receiving? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Answer 1

a-1. How long do you have to pay before the account is overdue?

• 50 days

a-2. If you take the full period, how much should you remit?

• if you pay after the discount period (first 30 days) but before the 50th day, you must pay $84,800

b-1. What is the discount being offered?

• 2% if you pay within 30 days

b-2. How quickly must you pay to get the discount?

• you have up to 30 days to pay the invoice and still get the discount

b-3. If you do take the discount, how much should you remit?

• $83,104

c-1. If you don’t take the discount, how much interest are you paying implicitly?

• $1,696

c-2. How many days’ credit are you receiving?

• the total credit period is 50 days