Blueroot Inc

question 71

Multiple Choice

Blueroot Inc.is considering a change in its financing policy.Currently, it 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 30 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 25%.If the firm implements the plan, what is the expected change in net income?

• A) $41,202
• B) $43,370
• C) $45,657
• D) $48,060
• E) $50,463

---

Definitions:

Education

The systematic process of facilitating learning and acquisition of knowledge, skills, values, and habits.

Public Opinion

refers to the collective preferences or attitudes of a population towards political issues, policies, institutions, or figures.

Collective Attitude

The shared outlook or beliefs of a group.

Generational Effect

The impact of historical events experienced by a particular generation which shapes their attitudes, behaviors, and values over their lifetime.