Sam Wainwright Is a New Accountant with Ground Floor Company

question 115

Essay

Sam Wainwright is a new accountant with Ground Floor Company.Ground Floor purchased merchandise on account for $18,000.The credit terms are 1/10, n/30.Sam has talked with the company's banker and knows that he could earn 4% on any money invested in the company's savings account.
Instructions
(a) Should Sam pay the invoice within the discount period or should he keep the $18,000 in the money market account and pay at the end of the credit period? Support your recommendation with a calculation showing which action would 1.(b) If Sam forgoes the discount, it may be viewed as paying an interest rate of 1% for the use of $18,000 for 20 days.Calculate the annual rate of interest to which this is equivalent.

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Definitions:

Cohabitational Violence

Violence that occurs between individuals who live together, often referring to domestic abuse between partners.

Ethical Obligations

Duties that arise from a set of moral principles that govern a person's behavior or the conducting of an activity.

Immigrant Students

Students who have moved from their country of birth to another country, often facing unique educational and social challenges.

Domestic Violence

A pattern of abusive behavior in any relationship that is used by one partner to gain or maintain control over another intimate partner.