A manufacturing company receives supplies under credit terms of 2/10, net 30, but typically takes 50 days to pay its bills. Calculate the effective cost of trade credit using a 365-day year.
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- Petron Pet Supplies sells on terms of 3/10, net 60. What is the effective annual cost of trade credit under these terms? Use a 365-day year.helpPetron Pet Supplies sells on terms of 3/10, net 60. What is the effective annual cost of trade credit under these terms? Use a 365-day year. ANSWERHail and Sons operates for 240 days in a year. It has been offered credit terms of 4/30 net 90 days. What will be the nominal annual percentage cost if it is non-free trade credit?
- Your company has been offered credit terms on its purchases of 4/30, net 90days. What will be the nominal annual cost of trade credit if your companypays on the 35th day after receiving the invoice? (Assume a 365-day year.) Show your complete solution.What is the effective cost??Assume the credit terms offered to your firm by your suppliers are 2/20, net 40. Calculate the cost of the trade credit if your firm does not take the discount and pays on day 40. (Hint: Use a 365-day year.)
- Need AnswerA large retailer obtains merchandise under the credit terms of 2/15, net 30, but routinely takes 50 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer's effective cost of trade credit? Assume a 365-day year. Do not round intermediate calculations. Round your answer to two decimal places.Credit terms of 4/30, net 90 days have been given to the Orchids Incorporated. What is the nominal annual percentate cost of the non-free trade credit if it pays within 120 days of purchase? (assume a calendar year of 365 days)