Additional Financing Assignment | Homework for You
June 11th, 2020
Problem 8-2 To finance additional inventory. Arbutus Ltd. is considering forgoing the cash discount on all of its purchases currently offered on terms of 270, net 45. No payments will be stretched. Annual purchases are $9.21 million.

a. Calculate the additional financing available to Arbutus Ltd. by forgoing the cash discount. (Use 365 days in a year. Do not round Intermediete calculations. Enter answer in whole dollar, not in millions. Don’t discount gross purchases to arrive at the accounts payable positions.) Additional financing available $
b. Calculate the annual cost of forgoing the cash discount. (Use 365 days in a year. Do not round intermediate calculations. Round the final answer to 2 decimal places.) Cost of lost discount % . Get Finance homework help today