A farmer purchases $500 per day of input supply, 360 days per
year. This totals annual purchases of $180,000. If the farmer takes
the early payment discount, he saves 3% of $180,000, or $5,400.
Since the farmer always pays each invoice on the tenth day, there
will be $5,000 owed in accounts payable at all times.
1) If the farmer pays all invoices on the thirtieth day, the
balance in accounts payable is:
2) If the farmer pays all invoices...