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(Solved): Problem 8-1 (Algo) Cash discount decision [LO8-1] Compute the cost of not taking the following cas ...
![Problem 8-1 (Algo) Cash discount decision [LO8-1]
Compute the cost of not taking the following cash discounts.
Note: Use a 36](https://media.cheggcdn.com/media/5bd/5bd08625-f5c0-4688-a5ec-f529e9c54c2d/phpDAjs6g)
Problem 8-1 (Algo) Cash discount decision [LO8-1] Compute the cost of not taking the following cash discounts. Note: Use a 360-day year. Do not round intermediate calculations. Input your final answers as a percent rounded to 2 decimal places.
Expert Answer
a. Calculation of cost of not taking cash discount: Formula; Cost of not taking cash discount = Discount % / (100 - Discount %) x 360 / (Allowed payment days – Discount days) Cost of not taking cash discount = 3 / (100 - 3) * 360 / (60 - 19) Cost of