You place an order for 550 units of inventory at a unit price of $190. The suppl

Question

You place an order for 550 units of inventory at a unit price of $190. The supplier offers terms of 3/15, net 90.

How long do you have to pay before the account is overdue?

If you take the full period, how much should you remit?

What is the discount being offered?

How quickly must you pay to get the discount?

If you do take the discount, how much should you remit?

If you don’t take the discount, how much interest are you paying implicitly?

How many days’ credit are you receiving?

You place an order for 550 units of inventory at a unit price of $190. The supplier offers terms of 3/15, net 90.

Explanation / Answer

Answer a-1 Days until overdue 90 days Answer a-2 Remittance $1,04,500 Answer b-1 Discount offered 3% Answer b-2 Number of days 15 days Answer b-3 Remittance $1,01,365 Answer c-1 Implicit interest $3,135 Answer c-2 Days Credit 90 days

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