If a vendor offers you an early payment discount of 3% if the invoice is paid in 10 days, else the payment is due in 30 days should you take the discount? What is the effective rate? (Consider the cost of borrowing is 12%):
0Yes, because the opportunity cost is approximately 25%.
0Yes, because the opportunity cost is approximately 56%.
0 No, because the opportunity cost is approximately 11%.
0 No, because the opportunity cost is approximately 24
Posts Tagged invoice
Is a "trade discount" given to promote a product to a first buyer viewed the same as a "sales discount" given on an invoice. Is it a contra-revenue account ?
Sales
Less: Sales Discount
Net Sales
I’m planning on getting a new car (Mazda6) in the next few months and I get an worker discount at the local Mazda dealer for 1% over invoice. I’ve never thought about it, but what does that mean? My natural assumption is that the price would be 1% more than the manufacturing price of the car, but I’m not sure if I’m right.
Apple Co. sells products on credit to Zea Co in the amount of ,000. The invoice must be dated on September 15 with terms of 1/15, net 45. What is the amount of the discount and up to what date must the invoice be paid in order for the buyer to take advantage of the discount?
A: 0, September 30
B: 0, September 25
C: , September 30
D: , September 25
I know the answer is C but how do you get the answer?