Firms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit, which affect the cost of asset of sale for the buyer as well as the seller. Consider this case: Free Spirit Industries Inc. buys on terms of 1/20, net 45 from its chief supplier. If Free Spirit receives an invoice for $1,254.98, what would be the true price of this invoice? (Note: Round all intermediate calculations to four decimal places, and your final answer to two decimal places.) O $1,304.55 O $1,056.07 O $1,242.43 O $1,118.19 The nominal annual cost of the trade credit extended by the supplier is , assuming a 365-day year. (Note: Round all intermediate calculations to four decimal places, and your final answer to two decimal places.) Suppose Free Spirit does not take advantage of the discount and then chooses to pay its supplier late-so that on average, Free Spirit will pay its supplier on the 50th day after the sale. As a result, Free Spirit can decrease its nominal cost of trade credit by by paying late. (Note: Round all intermediate calculations to four decimal places, and your final answer to two decimal places.)

Firms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit, which affect the cost of asset of sale for the buyer as well as the seller. Consider this case: Free Spirit Industries Inc. buys on terms of 1/20, net 45 from its chief supplier. If Free Spirit receives an invoice for $1,254.98, what would be the true price of this invoice? (Note: Round all intermediate calculations to four decimal places, and your final answer to two decimal places.) O $1,304.55 O $1,056.07 O $1,242.43 O $1,118.19 The nominal annual cost of the trade credit extended by the supplier is , assuming a 365-day year. (Note: Round all intermediate calculations to four decimal places, and your final answer to two decimal places.) Suppose Free Spirit does not take advantage of the discount and then chooses to pay its supplier late-so that on average, Free Spirit will pay its supplier on the 50th day after the sale. As a result, Free Spirit can decrease its nominal cost of trade credit by by paying late. (Note: Round all intermediate calculations to four decimal places, and your final answer to two decimal places.)

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Description: Firms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit, which affect the cost of asset of salefor the buyer as well as the seller.Consider this case:Free Spirit Industries Inc. buys on terms

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Firms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit, which affect the cost of asset of sale
for the buyer as well as the seller.
Consider this case:
Free Spirit Industries Inc. buys on terms of 1/20, net 45 from its chief supplier.
If Free Spirit receives an invoice for $1,254.98, what would be the true price of this invoice? (Note: Round all intermediate calculations to four
decimal places, and your final answer to two decimal places.)
O $1,304.55
$1,056.07
$1,242.43
O $1,118.19
The nominal annual cost of the trade credit extended by the supplier is
, assuming a 365-day year. (Note: Round all intermediate
calculations to four decimal places, and your final answer to two decimal places.)
Suppose Free Spirit does not take advantage of the discount and then chooses to pay its supplier late-so that on average, Free Spirit will pay its
by paying late. (Note:
supplier on the 50th day after the sale. As a result, Free Spirit can decrease its nominal cost of trade credit by
Round all intermediate calculations to four decimal places, and your final answer to two decimal places.)

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