Question

In: Finance

When deciding whether or not to take a trade discount, the cost of borrowing funds should...

When deciding whether or not to take a trade discount, the cost of borrowing funds should be compared to the cost of trade credit to determine if the cash discount should be taken.

True

False

Solutions

Expert Solution

TRUE

Given statement is True. When deciding whether or not to take a trade discount, the cost of borrowing funds should be compared to the cost of trade credit to determine if the cash discount should be taken. If the cost of borrowing funds is less than the cost of trade credit / discount, then trade discount should be taken.

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

1. Describe the procedures that an auditor should perform when deciding whether or not to take...
1. Describe the procedures that an auditor should perform when deciding whether or not to take on a new client. 2. What is the purpose of the engagement letter? 3. Consider the following statement: When inherent and control risk are assessed as high, the risk of material misstatement is assessed as high, and an auditor will set detection risk as low to reduce audit risk to an acceptably low level. Explain what it means to set detection risk as low....
Deciding Factors What factors should a business consider when deciding whether to use a SaaS product...
Deciding Factors What factors should a business consider when deciding whether to use a SaaS product vs. a local running, non-cloud alternative? Are the factors the same for an individual or are they different?
7. What is the primary trade-off that an accountant must consider when deciding whether to identify...
7. What is the primary trade-off that an accountant must consider when deciding whether to identify cost drivers? Is the cost/benefit of the process reasonable for more accurate cost behavior obtained. Will the cost driver identification provide different costs for different purposes. Will material related drivers be more accurate than labor-related drivers. Will the cost relationship be to complex to understand. There is no trade-off to consider using cost drivers.
Explain the factors that a firm should consider when deciding whether to undertake an Initial Public...
Explain the factors that a firm should consider when deciding whether to undertake an Initial Public Offering.
Using additional resources, you should take a position on whether a trade war with China is...
Using additional resources, you should take a position on whether a trade war with China is good or bad for U.S. Consumers. What about U.S. workers? What about U.S. business? What does the theory of Comparative Advantage tell you about whether we are better or worse off with free trade? As part of your posting, please take a position on whether the next president should continue or attempt to halt the current trade war.
1 Show the main variables that a company should consider when deciding whether to expand abroad...
1 Show the main variables that a company should consider when deciding whether to expand abroad and where to do so. We provide specific examples of a company you know that is still local or national and which country or countries could expand.
Explain why companies should discount projects using the cost of equity. When should they use the...
Explain why companies should discount projects using the cost of equity. When should they use the WACC instead? When should they use either?
What are some factors Santana Rey should consider before borrowing the funds?
Question Santana Rey has consulted with her local banker and is considering financing an expansion of her business by obtaining a long-term bank loan. Selected account balances at March 31, 2018, for Business Solutions follow. Total assets . $120,268 Total liabilities . $875 Total equity $119,393 Required 1. The bank has offered a long-term secured note to Business Solutions. The bank’s loan procedures require that a client’s debt-to-equity ratio not exceed 0.8. As of March 31, 2018, what is the...
1. why should the incremental cost of a risk response alternative be considered when deciding how...
1. why should the incremental cost of a risk response alternative be considered when deciding how best to respond to an important risk? 2. what is a focused value stream? 3. why are units shipped used to calculate the value stream? 4. when will the average unit cost be used for value stream?
2.         In deciding on whether to keep or drop a segment, the segment should be kept...
2.         In deciding on whether to keep or drop a segment, the segment should be kept as long as its contribution margin exceeds: all costs. all variable costs. avoidable fixed costs. allocated common costs.                    3.         A firm decided to emphasize those goods with the highest contribution margin per unit. It may have made an incorrect decision when the firm: is highly automated. has excess capacity. has a limited supply of manufacturing resources. has a high level of sunk...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT