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Average Accounts Payable

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An appliance store, APP Corporation, purchases inventory with a net price so $500,000 each day. The company purchases the inventory under the credit terms of 2/15, net 40. APP always takes the discount, but takes the full 15 days to pay its bills. What is the average account payable for APP?

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The solution explains how to calculate the average accounts payable

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Since the corporation takes 15 days to pay, it would always have 15 days of ...

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