08-06-2010, 05:16 PM
Good Day All
Part A
A debtor age analysis reveals that a customer has owed R90 000 for 2months longer than the credit policy of 3 months.The company marks up all goods by 60% on cost and has a required rate of return of 18%.What will be the additional cost to the company of not receiving payment on time.
Part B
A supplier offers the following terms of payment, 5/1 month,net 3 months. The bank charges interest at the rate of 20% per annum on borrowings.Now the question is ,determine if it is of benefit to the firm to pay the supplier earlier.
Please any one who can solve this for me, i will appreciate it very much
Flora
Part A
A debtor age analysis reveals that a customer has owed R90 000 for 2months longer than the credit policy of 3 months.The company marks up all goods by 60% on cost and has a required rate of return of 18%.What will be the additional cost to the company of not receiving payment on time.
Part B
A supplier offers the following terms of payment, 5/1 month,net 3 months. The bank charges interest at the rate of 20% per annum on borrowings.Now the question is ,determine if it is of benefit to the firm to pay the supplier earlier.
Please any one who can solve this for me, i will appreciate it very much
Flora
