Cost of Trade Credit A large retailer obtains merchandise under the credit terms of 1/15, net 40, but routinely takes 60 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.   %

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A: When the customer purchases goods on a card with a credit facility, it is referred to as a credit…

Q: Nottingham Financial purchases computer parts from its suppliers 2/10, net 60.  However, Nottingham…

A: Effective Cost of not taking Trade Credit = (1 + Discount/(100 -discount)) ^(365/( days of credit…

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A: Tongaat Wholesaler's normal credit terms to Troy Stores are set at 60 days. This means that Troy…

Q: If a firm's supplier has a 3/10/60 credit policy, the cost of trade credit per period is equal to O…

A: cost of trade credit is the cost of not taking the discount.

Q: Use 360 days in a year. Solutions must be complete (including formulas). Present rates in percent…

A: Discount is a selling goods or service below the price of goods. This reduction in price is offered…

Q: What are the nominal and effective costs of trade credit under the credit terms of 2/20, net 35?…

A: Credit terms specify the rate of discount a business can obtain when full payment is made within the…

Q: Consider a credit card with an APR of 21.99% and a minimum payment each month of 6% of the new…

A: Interest Rate 21.99% Minimum Payment 6% Carryover Balance  $400.00

Q: McDowell Industries sells on terms of 4/10, net 40. Total sales for the year are $825,500. Thirty…

A: Discounted customers=15×30%=4.5 days

Q: ABC sells on credit terms of 2/10, n/30. Daily sales average 200 units at P2,500 each throughout the…

A: ABC sells on credit terms of 2/10, n/30. Daily sales average = 200 units Sale price = P2500 each All…

Q: Calculate the nominal annual cost of trade credit under each of the following terms. Assume a…

A: Annual nominal cost of trade credit = Discount %/(100-Discount %) x (360/Allowed payment days –…

Q: Route Canal Shipping Company has the following schedule for aging of accounts receivable: Age of…

A: Accounts receivable aging is a periodic report that categorizes a company's accounts receivable…

Q: Calculate the nominal annual cost of trade credit under each of the following terms. Assume a…

A: Given:

Q: Assume the credit terms offered to your firm by your suppliers are 4​/15​, net 30. Calculate the…

A: Discount is the reduction in the cost of product at the time of purchase. The trade discount is the…

Q: Problem B: Cost of Trade Credit ABC has a major supplier that offers a credit term of 2/15, n/45.…

A: In credit terms, if the payment is done within a specific period then a certain discount is provided…

Q: Tobin Fisheries currently sells to its customers on terms of 2/11, net 31. Its average collection…

A: “Since you have posted multiple questions, we will provide the solution only to the first question…

Q: 3) A large retailer obtains merchandise under the credit terms of 3/10, net 30, but routinely takes…

A: Discount Rate = 3% Discount Period = 10 days Credit Period = 50 days

Q: Compute the cost of not taking the following trade discounts: (Use 365 days in a year. Round the…

A: aCost of not taking discount is = [(365/(Total pay period - Discount period))*(Discount…

Q: McEwan Industries sells on terms of 3/10, net 40. Total sales for the year are $1,912,500; 40% of…

A: Days Sales Outstanding (DSO) is a term used to describe the average time it takes for a business to…

Q: Sway Tailors currently has credit terms of net 30, an average collection period of 29 days, and…

A: The account receivables are also known as the debtors. These are the values due to a firm on which…

Q: Catz Corp. sells its goods with terms of 3/10 EOM, net 45. What is the implicit cost of the trade…

A: Solution: Let's gross price = 100 Net price if paid in 10 days = 100 - 100*3% = 97 Credit period…

Q: ith a new supplier are 2/10, net 30 If unable to pay within the discount period and pay the cash…

A: Companies gives discount to customers to pay early because that is big cost to the company because…

Q: Bumpas Enterprises purchases $4,562,500 in goods per year from its sole supplier on terms of 5/10,…

A: Trade credit is a type of credit that is extended by a business to its customers. It allows…

Q: A company is offred trade credit terms of 3/15, net 30 days. If the firm does not take the discount,…

A: The term 2/15, net 30 days means customer will get 3% discount if he pay within 15 days but here…

Q: How much does the account stretching reduce the cost of not taking the trade discount? Select one:

A: Accounts Payable: These are amounts owed to the suppliers or vendors by the firm. These are recorded…

Q: The cost of product X is 30 percent of its selling price, and the carrying cost is 8 percent of…

A: Solution Given Cost of product 30% of selling price Carrying cost 8% of selling price…

Q: Problems: (A) Understanding Receivables: ABC sells on credit terms of 2/1o, n/30. Daily sales…

A: Solution: Accounts receivable is defined as those customers who have purchased the goods or taken…

Q: Calculate the nominal annual cost of trade credit under each of the following terms. Assume a…

A: Cost of Trade Credit: The cost of trade credit is calculated using the following formula: Cost of…

Q: Provide answer

A: Solution:The cash conversion cycle (CCC) measures the time (in days) that a company takes to convert…

Q: %

A: rnom = [Discount % / 1 - Discount % ]  * [ 365 days/ Days credit is outstanding - Discount Period]…

Q: Cost of Trade Credit Grunewald Industries sells on terms of 2/10, net 50. Gross sales last year…

A:

Q: Choose the letter of answer and provide solution A firm has total annual sales (all credit) of…

A: Average collection period shows the number of days in which amount due from accounts receivables…

Q: When customers purchase goods on account, Spitz Manufacturing offers them a 2% reduction in the…

A: The objective of the question is to identify the correct accounting term for the scenario where…

Q: Bumpas Enterprises purchases $4,562,500 in goods per year from its sole supplier on terms of 4/10,…

A: Trade credit is a type of credit that is extended by a business to its customers. It allows…

Q: Mariota's has annual sales of $539,200 and cost of goods sold of $350,480. The beginning accounts…

A: Average collection periods represent the average number of days taken to collect the receivables of…

Q: nternational Industries sells on terms of 3/10, net 50. Gross sales last year were 5,662,500 and…

A: The calculation of gross and discounted sales has been made as follows: Gross Sales per day =Total…

Q: ullumber Corp. sells its goods with terms of 3/10 EOM, net 45. What is the implicit cost of the…

A: Solution Concept terms of 3/10 EOM, net 45               It means that if the amount is paid by 10th…

Q: CURRENT LIABILITIES MANAGEMENT 3. Stargazer Company purchases on terms of 2/15, net 30 days. It does…

A: When a company does not incur any additional cost on paying the invoice that is known as free trade…