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Explain your recommendation.E6-6B (Similar to E6-8) [LO 4] Recording Bad Debt Expense Estimates and Write-Offs Using the Percentage of Credit Sales Method ...

Interest rate is the amount charged by lenders to borrowers for the use of money, expressed as a percentage of the principal, or original amount borrowed; it can also be described alternatively as the cost to borrow money. For instance, an 8% interest rate for borrowing $100 a year will obligate a person to pay $108 at year-end.

Sep 26, 2017 · Calculate the effective annual rate. Divide 365 by the difference between the credit and the discount periods, then multiply that result by the implied cost. To conclude the example, the effective annual rate is equal to 1.01 percent multiplied by (365 divided by (45 minus 10)), or approximately 10.5 percent. References Writer Bio

27.04.2021 · Recalculating the implicit rate of the lease. Based on the inputs in Example 1, the calculated implicit rate in the lease is 4.58%. Applying 4.58% as the discount rate, the present value of the future lease payments should equate to $55,000. This can be demonstrated in Excel using either PV or NPV function.

Evaluating the Annual Interest Rate Implicit in a Sales Discount with Discussion of Management Choice of Financing Strategy Clark’s Landscaping bills customers subject to terms 3/10, n/50. Required: 1. Compute the annual interest rate implicit in the sales discount. (Round to two decimal places.) 2.

11.04.2021 · Subtract the discount percentage from 100% and divide the result into the discount percentage. For example, under 2/10 net 30 terms, you would divide 2% by 98% to arrive at 0.0204. This is the interest rate being offered through the credit terms. Multiply the result of both calculations together to obtain the annualized interest rate.

When you deal with leases in accordance with standard IAS 17 Leases, FAS 13 or any other applicable standard, you know for sure that the lease should be measured, whether initially or subsequently, using interest rate implicit in the …

Laura's Landscaping bills customers subject to terms 4/10, n/60. Required: 1. Compute the annual interest rate implicit in the sales discount. (Round to two ...

Compute the annual interest rate implicit in the sales discount. (Use 365 days in a year. Do not round intermediate calculations. Enter your answer)

Compute the annual interest rate implicit in the sales discount. (Use 365 days in a year. Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (i.e. 0.1234 should be entered as 12.34).)

Clark's Landscaping bills customers subject to terms 3/10, n/50. Required: 1. Compute the annual interest rate implicit in the sales discount. (Round to two ...

Second, divide 365 by the number of extra days you have to pay in full to find the number of periods per year. Third, subtract the discount as a decimal from 1 ...

Step-by-step solution Step 1 of 5 Credit terms given: 4/10, n/60. 1. Implicit interest in the sales discount = Implicit Interest in the sales discount = Implicit Interest in the sales discount = 0.3042 Implicit Interest in the sales discount = 30.42% annual interest rate Chapter 6, Problem 5E is solved. View this answer View a sample solution

Solutions for Chapter 6 Problem 5E: Evaluating the Annual Interest Rate Implicit in a Sales Discount with Discussion ofManagement Choice of Financing StrategyLaura’s Landscaping bills customers subject to terms 4/10, n/60.Required:1. Compute the annual interest rate implicit in the sales discount. (Round to two decimal places.)2. If his bank charges 15 percent interest, …

27.08.2020 · The rate implicit in the lease is the interest rate charged by the lessor in the lease agreement. This is essentially the return or margin the lessor is receiving from the lease agreement, and as such, the lessor can be unwilling to name the rate outright. Since the rate of return for the lease is not stated, it is implied.

Well – at the rate implicit in the lease, or the internal rate of return on all payments or receipts from the lease. Thus, when you appropriately discount all ...

In other words, the discount rate is the interest rate being charged by the lessor to the lessee for leasing the asset.

2 Lessor discount rate 4 2.1ate implicit in the lease R 4 2.2ractical issues for lessors P 6 3 Lessee discount rates 9 3.1 Implicit vs incremental borrowing rate 9 3.2 Implicit rate – Lessee issues 11 3.3 Incremental borrowing rate 15 4 Specific scenarios 20 …

Evaluating the Annual Interest Rate Implicit in a Sales Discount with Discussion of Management Choice of Financing Strategy Clark’s Landscaping bills customers subject to terms 3/10, n/50. Required: 1. Compute the annual interest rate implicit in the sales discount. (Round to two decimal places.) 2.

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Annual : 2.04% * 360/20 = 36.7% If your objective is to optimize your investment in your business, an annual discount rate higher than your weighted average cost of capital means it is a good opportunity since the discount ends up being more profitable than investing in another sector of the business.

21.06.2012 · Implicit interest rate is the interest rate implied when borrowing a fixed amount of money and returning a different amount of money in the …

Compute the annual interest rate implicit in the sales discount. (Round to two decimal places.) 2. If his bank charges 15 percent interest, should the customer ...

The formula you will use is total amount paid/amount borrowed raised to 1/number of periods = x. Then x-1 x100 = implicit interest rate.

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