Business, 03.12.2019 22:31 mikefarris01

Gonzales company currently uses maximum trade credit by not taking discounts on its purchases. the standard industry credit terms offered by all its suppliers are 2/10, net 38 days, and the firm pays on time. the new cfo is considering borrowing from its bank, using short-term notes payable, and then taking discounts. the firm wants to determine the effect of this policy change on its net income. its net purchases are $11,760 per day, using a 365-day year. the interest rate on the notes payable is 10%, and the tax rate is 40%. if the firm implements the plan, what is the expected change in net income?

a. 32,147
b. 36,084
c. 38,052
d. 33,787

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Gonzales company currently uses maximum trade credit by not taking discounts on its purchases. the s...

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