You place an order for 310 units of inventory at a unit price of $160. The suppl

Question

You place an order for 310 units of inventory at a unit price of $160. The supplier offers terms of 1/15, net 90. a-1 How long do you have to pay before the account is overdue? Days until overdue days a-2 If you take the full period, how much should you remit? Remittance $ b-1 What is the discount being offered? Discount offered % b-2 How quickly must you pay to get the discount? Number of days days b-3 If you do take the discount, how much should you remit? Remittance $ c-1 If you don’t take the discount, how much interest are you paying implicitly? Implicit interest $ c-2 How many days’ credit are you receiving? Days' credit days

Explanation / Answer

a-1) 90 days

a-2) Remit = =310*160 = $49600

b-1) discount offered = 1%

b-2) We have to pay 75 days quickly in order to get discount. (i.e paymnet should be mad ewithing first 15 days)

b-3) Remit = 49600*(1-1%) = $49104

c-1) Extra amount paid if discount is not taken = $496

c-2) 10 credit days

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