3. value: 5.88 points You place an order for 530 units of inventory at a unit pr

Question

3. value: 5.88 points You place an order for 530 units of inventory at a unit price of $150. The supplier offers terms of 1/15, net 30. 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

1/15, net 30 : This denotes that if paid within 15 days then 1% discount can be availed, otherwise it has to be paid within 30 days

a1) Days until overdue : 30 days

a2) Remit if full period = 530*150 = $ 79,500

b1) discount offered : 1%

b2) To get discount it must be paid within : 15 days

b3) if discount taken, amount remit : = 530*150*.99 = $ 78,705

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