60eBookCalculate the APR and rEAR of non-free trade credit associated with credit terms of 2/20, net 50, and 1.5/30, net 50, assuming that customers who do not take the discounta. pay on the last due date. Assume there are 360 days in a year. Do not round intermediate calculations. Round your answers to two decimal places.APRTEARCredit terms of2/20, net 50APRTEARb. delay payment until 10 days after the last due date. Assume there are 360 days in a year. Do not round intermediate calculations. Round your answers to two decimal places.%%2/20, net 501.5/30, net 50Credit terms of%%%1.5/30, net 50%%Check My Work (2 remaining)

Trade credit is a kind of short term financing for buyers and it helps in improving their cash…

Calculate the APK and rEAR of non-free trade credit associated with credit terms of 2/20, net 50, and 1.5/30, net 50, assuming that customers who do not take the discount a. pay on the last due date. Assume there are 360 days in a year. Do not round intermediate calculations. Round your answers to two decimal places. Credit terms of 1.5/30, net 50 APRI TEAR 2/20, net 50 APRI TEAR . delay payment until 10 days after the last due date. Assume there are 360 days in a year. Do not round intermediate calculations. Round your answers to two decimal places. % Credit terms of 2/20, net 50 1.5/30, net 50 %

Calculate the APK and rEAR of non-free trade credit associated with credit terms of 2/20, net 50, and 1.5/30, net 50, assuming that customers who do not take the discount a. pay on the last due date. Assume there are 360 days in a year. Do not round intermediate calculations. Round your answers to two decimal places. Credit terms of 1.5/30, net 50 APRI TEAR 2/20, net 50 APRI TEAR . delay payment until 10 days after the last due date. Assume there are 360 days in a year. Do not round intermediate calculations. Round your answers to two decimal places. % Credit terms of 2/20, net 50 1.5/30, net 50 %

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Cost of Trade Credit Calculate the nominal annual cost of trade credit under each of the following terms. Assume a 365-day year. Do not round intermediate calculations. Round your answers to two decimal places. 1/15, net 25. % 2/10, net 55. % 3/10, net 45. % 2/10, net 45. % 2/15, net 35. %
Cost of Trade Credit Calculate the nominal annual cost of trade credit under each of the following terms. Assume a 365-day year. Do not round intermediate calculations. Round your answers to two decimal places. 1/15, net 25. % 2/10, net 60. % 3/10, net 50. % 2/10, net 50. % 2/15, net 40. %
Required: a. A firm currently offers terms of sale of 3/25, net 50. Calculate the effective annual rate. a-1. Calculate the effective annual rate if the terms are changed to 4/25, net 50. a-2. What effect does an increase in the discount rate have on the implicit interest rate charged to customers that pass up the discount? b-1. Calculate the effective annual rate if the terms are changed to 3/35, net 50. b-2. What effect does a decrease in the extra days of credit have on the implicit interest rate charged to customers that pass up the discount? c-1. Calculate the effective annual rate if the terms are changed to 3/25, net 40. c-2. Is there any difference between the implicit interest rate for terms of 3/35, net 50 and 3/25, net 40?
Calculate the missing information on the following revolving credit accounts. Interest is calculated on the unpaid or previous month's balance. Do not enter the percent symbol in your answer. Round your answers for finance charge and new balance to the nearest cent. Annual Monthly Purchases Payments Previous Percentage Periodic Finance and Cash and New Balance Rate (APR) Rate Charge Advances Credits Balance $862.25 0.25% $156.80 $417.00
You have an account with a $1500 credit limit that charges 13.25% interest using the average daily balance method. Assuming a 30-day month, you start with a balance of $350 on Day 1. On Day 5, you charge $100, and you pay $60 on Day 15. What is your average daily balance, assuming charges and payments begin the next day? Round your answer to 2 decimal places and do not include the dollar sign
Cullumber Corp. sells its goods with terms of 3/10 EOM, net 45. What is the implicit cost of the trade credit? (Do not round itermediate calculations. Use 365 days for calculation. Round answer to 2 decimal places, e.g. 12.25%.) The implicit cost of the trade credit is My answer was wrong ... can someone help me with this please?
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Hillz sells its goods with terms of 1/16 EOM, net 30. What is the implicit cost of the trade credit? (Do not round intermediate calculations. Use 365 days for calculation. Round answer to 2 decimal places, e.g. 12.25%.)
A firm offers terms of 1.2/10, net 60. a. What effective annual interest rate does the firm earn when a customer does not take the discount? (Use 365 days a year. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What effective annual interest rate does the firm earn if the terms are changed to 2.2/10, net 60, and the customer does not take the discount? (Use 365 days a year. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. What effective annual interest rate does the firm earn if the terms are changed to 1.2/10, net 75, and the customer does not take the discount? (Use 365 days a year. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) d. What effective annual interest rate does the firm earn if the terms are changed to 1.2/15, net 60, and the customer does not…
Examine the points versus no points chart to respond to the following query: Determine the percentage that the total interest paid will drop from buying no points to three points. To the closest hundredth, round the final response.

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