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A chain of appliance stores, APP Corporation, purchases inventory with a net price of $450,000 each...

A chain of appliance stores, APP Corporation, purchases inventory with a net price of $450,000 each day. The company purchases the inventory under the credit terms of 2/15, net 30. APP always takes the discount, but takes the full 15 days to pay its bills. What is the average accounts payable for APP?

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Expert Solution

Average accounts payable for APP = Net inventory per day x Days in discount period

Average accounts payable for APP = $450,000 x 15

Average accounts payable for APP = $6,750,000

jeff jeffy answered 2 years ago
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