ueposit l of $8,000. What is your net float? 4. ABREX Corporation extends an unusually...
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ueposit l of $8,000. What is your net float? 4. ABREX Corporation extends an unusually long and generous c redit terms to its clients of 5/20 et 90. Assume 1 month 30 days.; 1 year 365days (a) How long is the discount period? (b) What is the cash discount? (c) What is the credit period? (d) What exactly is the company's credit term? (e) If on average, based on their historical experience, Abrex Corporation makes $50,000 a day, all credit. What is Abrex's investment in accounts receivable per quarter? w much in terms of Effective Annual Rate (EAR) will singer lose to a client who made a credit purchase for $10,000 and who decided to take advantage of the discount by paying within 10 days? () Ho (g) How much in terms of EAR will Mary lose to Abrex if she decided not to take advantage of the (h) If, say, Mary chose not to take the discount because she planned to invest the money elsewhere she discount offer? hoped to make a return of 40%, would she have made a good or bad decision by not taking advantage of the credit? How much will Abrex collect in one quarter if all of its clients choose to take advantage of the discount offer, assuming again, $50,000 in daily sales, all on credit? (i) i of $50. The supplier offers terms of 2/10, net
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