Terms of SaleE5B. A household appliance dealer buys refrigerators from a manufacturer and resellsthem to its customers.a. The manufacturer sets a list or catalogue price of $2,500 for a refrigerator. The manufacturer offers its dealers a 30 percent trade discount.b. The manufacturer sells the machine under terms of FOB destination. The cost ofshipping is $240.c. The manufacturer offers a sales discount of 2/10, n/30. Sales discounts do not applyto shipping costs.What is the net cost of the refrigerator to the dealer, assuming it is paid for within 10days of purchase? Chapter 11, E5BFace value of 30-year, 8% zero coupon bonds, compounded annually:Present value of a single payment at the end of 30 periods at 8%(from Table 1*):Face value xFace value =Face value =Face value of 50-year, 8% zero coupon bonds, compounded annually:Present value of a single payment at the end of 50 periods at 8%(from Table 1"):Face value xFace value =Face value =Face value of 30-year, 6% zero coupon bonds, compounded annually:Present value of a single payment at the end of 30 periods at 6%(from Table 1*):Face value xFace value =Face value =$143,578,279 Face value of 50-year, 6% zero coupon bonds, compounded annually:Present value of a single payment at the end of 50 periods at 6%(from Table 1*):eroFace value xFace value =Face value =$460,503,857*From the appendix on present value tables.

Trade discount: Seller of a product or service offers a reduction in the listed price of the…

Answered: Chapter 11, E5B Face value of 30-year,…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter11: Notes, Bonds, And Leases

Section: Chapter Questions

Problem 16E

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Terms of Sale
E5B. A household appliance dealer buys refrigerators from a manufacturer and resells
them to its customers.
a. The manufacturer sets a list or catalogue price of $2,500 for a refrigerator. The manufacturer offers its dealers a 30 percent trade discount.
b. The manufacturer sells the machine under terms of FOB destination. The cost of
shipping is $240.
c. The manufacturer offers a sales discount of 2/10, n/30. Sales discounts do not apply
to shipping costs.
What is the net cost of the refrigerator to the dealer, assuming it is paid for within 10
days of purchase?

Chapter 11, E5B
Face value of 30-year, 8% zero coupon bonds, compounded annually:
Present value of a single payment at the end of 30 periods at 8%
(from Table 1*):
Face value x
Face value =
Face value =
Face value of 50-year, 8% zero coupon bonds, compounded annually:
Present value of a single payment at the end of 50 periods at 8%
(from Table 1"):
Face value x
Face value =
Face value =
Face value of 30-year, 6% zero coupon bonds, compounded annually:
Present value of a single payment at the end of 30 periods at 6%
(from Table 1*):
Face value x
Face value =
Face value =
$143,578,279

Face value of 50-year, 6% zero coupon bonds, compounded annually:
Present value of a single payment at the end of 50 periods at 6%
(from Table 1*):
ero
Face value x
Face value =
Face value =
$460,503,857
*From the appendix on present value tables.

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