question archive QUESTION 17 Al-Watan sells its goods with terms of 3/15, net 60
QUESTION 17 Al-Watan sells its goods with terms of 3/15, net 60
Subject:FinancePrice:2.86 Bought11
QUESTION 17 Al-Watan sells its goods with terms of 3/15, net 60. What is the cost of the trade credit? (Hint: Assume BD 100 sales and 365 days) For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BI U S Paragraph Arial 14px A a 6 v !!!! ABC ?? EX T V Q V e 1 X2 X 3 The HEN ( † 6) 62 K- O WORDS POWERED BY TIN QUESTION 18 3 points Save A Behbehani Motors, one of the largest car dealers in Bahrain, sells about 700 vehicles a year. The cost of placing an order with their supplier is BD 1,100, and the inventory carryin costs are BD 120 for each car. Most of their sales are in late fall of each year. What would be the number of cars per order to minimize inventory cost according to EOQ? For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BI y s Paragraph Arial 14px o
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Question 17
Cost of trade credit = Discount %/(1-Discount %) x (360/(Full allowed payment days - Discount days))
here discount = 3%
discounted days = 15
allowed payment days = 60
cost of trade credit = [3%/(1-3%)] x [360/(60-15)] = 3.0927 x 8 = 24.76%
Question 18
EOQ = ? EOQ = square root of (2 x D x S/H) or √ (2DS / H)
here D = Annual demand = 700
S = Ordering cost = 1100
H = carrying cost per unit = 120
EOQ = square root of (2 x 700 x 1100/120)
EOQ = 114 rounded to nearest decimal(113.284)
