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, which is 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, and t = 60/365. This gives a present value of approximately $14,789.

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