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Compute the cost of not taking the following cash discounts. (Use a 360-day year. Do not round intermediate calculations. Inp
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Answer #1

Cost of not taking a cash discount = [Discount %/(100% − Discount %)] × [360/(Final due date − Discount period)]

a. Cost of lost discount = (3%/97%) × [360/(65 - 14)] = 21.83%

b. Cost of lost discount = (3%/97%) × [360/(45 - 23)] = 50.61%

c. Cost of lost discount = (4%/96%) × [360/(55 - 11)] = 34.09%

d. Cost of lost discount = (4%/96%) × [360/(145 - 18)] = 11.81%

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