The Ault Company made a credit sale of £15,000.The invoice was sent today with the terms, 3/15 net 60.This customer normally pays at the net date.If your opportunity cost of funds is 9% the
Expected payment is worth how much today?

Question

Quizplus · Accepted Answer

The customer pays at the net date (60 days). The present value of £15,000 due in 60 days at a 9% annual interest rate is calculated using the formula: PV = FV / (1 + r/n)^(nt). Here, FV = £15,000, r = 0.09, n = 365/60, t = 60/365. This gives a present value of approximately £14,789.

The Ault Company Made a Credit Sale of £15,000