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Product Q
The annual demand for Product Q is 456,000 units per year and Plot Co buys in this product at $1 per unit on
60 days credit. The supplier has offered an early settlement discount of 1% for settlement of invoices within 30 days.
Other information
Plot Co finances working capital with short-term finance costing 5% per year. Assume that there are 365 days in each year.
how do we calculate net benefit/cost for these type of questions????For this sort of question you can be can be asked to calculate the net benefit/cost per year (but not the effective annual cost – not for this sort of question).
You can find out how to do it by watching our free lectures on this – I am sorry but I cannot type them all out here.
(Our lectures are a complete course for Paper F9 and cover everything you need to be able to pass the exam well)
Thank you sir.! i actually have already watched your lectures but i found this quite complicated as it was payables..but now i understood.
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