Gonzales Company Currently Uses Maximum Trade Credit by Not Taking

question 21

Multiple Choice

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 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 40%.If the firm implements the plan,what is the expected change in net income?

• A)$32,964
• B)$34,699
• C)$36,526
• D)$38,448
• E)$40,370

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Definitions:

Transportation Management System (TMS)

A subset of supply chain management concerning transportation operations, using technology to optimize, plan, and execute the physical movement of goods.

Routing And Scheduling

The process of determining the most efficient routes and schedules for transportation of goods to optimize delivery times and reduce costs.

Load Tendering

The process by which a shipper offers a shipment to a carrier, typically using electronic methods, to transport goods from one place to another.

Status Tracking

The monitoring and recording of the progress or current state of a project, order, or task.