Ask Question
7 September, 09:50

Memphis Metro just made a $75,000 purchase from a supplier, subject to the extension of suit-able trade credit terms. Using a discount rate of 7%, calculate the present value of this cash outflow assuming trade credit terms ofa. 30 daysb. 45 daysc. 60 daysd. 90 days

+5
Answers (1)
  1. 7 September, 11:25
    0
    The Calculation of the Present Value of this cash outflow assuming trade credit terms of a. 30 days b. 45 days c. 60 days d. 90 days would be the following:

    a. 30 days is $74,625

    b. 45 days is $74,325

    c. 60 days is $74,100

    d. 90 days is $73,725

    Explanation:

    The Calculation of the Present Value of this cash outflow assuming trade credit terms of a. 30 days b. 45 days c. 60 days d. 90 days would be the following:

    a. 30Days

    Present Value = Future Value / (1+r) ^n

    $75,000 / (1.07) ^30/365

    $75,000*.995

    Present Value = $74,625

    b. 45 Days

    Present Value = Future Value / (1+r) ^n

    $75,000 / (1.07) ^45/365

    75,000*.991

    Present Value = $74,325

    c. 60Days

    Present Value = Future Value / (1+r) ^n

    $75,000 / (1.07) ^60/365

    $75,000*.988

    Present Value = $74,100

    d. 90 Days

    Present Value = Future Value / (1+r) ^n

    $75,000 / (1.07) ^90/365

    $75,000*.983

    Present Value = $73,725
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Memphis Metro just made a $75,000 purchase from a supplier, subject to the extension of suit-able trade credit terms. Using a discount rate ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers