5. MoJo Corporation purchases goods on credit terms of 4.5/15, net 40. The cost

Question

5. MoJo Corporation purchases goods on credit terms of 4.5/15, net 40. The cost of non-free trade credit for the 25-day period if the firm did not take discounts but did pay on the due date is: a. 4.5%. b. 4.71%. c. 0%. d. 4.93% e. 5.02%. . 6. Which of the following statements is true of the financial breakeven point? a. It determines the impact of a firm's financing mix on its earnings per share b. It determines the level of sales of a new product required for the firm to achieve profitability. c. It determines the effects of a general expansion in the level of a firm's operations. d. It analyzes the consequences of purchasing modernization projects where the fixed investment in equipment is increased. e. It represents the level of production and sales at which net operating income is zero.

Explanation / Answer

6-e- it represent the level of production and sale at which net operating income is zero

5-Cost of trade credit:= (1+D÷(1-D))^(365÷n)-1

(1.045 / (1-.045))^(365/25)-1

1.045/.5105 =1.0467 = 1.0467-1 = 4.67% = 4.7%

Related Questions

Navigate

• Browse (All)
• Browse 5
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.