FIN3702 Working Capital Management (FIN3702)
University of South Africa
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FIN3702 ASSIGNMENT 2 SEMESTER 1
- Exam (elaborations) • 17 pages • 2022
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FIN3702 ASSIGNMENT 2 SEMESTER 1. The cost of giving up a cash discount under the terms 5/20 net 120 assuming a 365-day 
year is … 
1. 15.00%. 
2. 15.80%. 
3. 18.94%. 
4. 19.21%. 
The correct answer is option 4. 
19.21% 
Cost of giving up a cash discount = 
 
 
 
 = 
 
 
 
 
 
= 19.21% 
Gitman et al 2010, chapter 15:607 
Gitman et al 2014, chapter 16:625 
3 
QUESTION 2 
A firm has actual sales in November of R1 000 and projected sales in December and 
January of R3 000 and R4 000 respectively....
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