2B5G DEXTER PRODUCTS RECEIVES $25,000 WORTH OF MERCHANDISE FROM ITS M...
144.
CSO: 2B5b
LOS: 2B5g
Dexter Products receives $25,000 worth of merchandise from its major supplier on the
15th and 30th of each month. The goods are sold on terms of 1/15, net 45, and Dexter
has been paying on the net due date and foregoing the discount. A local bank offered
Dexter a loan at an interest rate of 10%. What will be the net annual savings to Dexter if
it borrows from the bank and utilizes the funds to take advantage of the trade discount?
a.
$525.
b.
$1,050.
c.
$1,575.
d.
$2,250.