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Green Moose Industries buys on terms of 2.5/15, net 45 from its chief supplier. Suppose Green Moose does not take advantage of the discount and the average. On average, Green Moose will pay its supplier on the 50th day after the sale. As a result, Green Moose can decrease its nominal cost of trade credit by by paying late.

Green Moose Industries buys on terms of 2.5/15, net 45 from its chief supplier. Suppose Green Moose does not take advantage of the discount and the average. On average, Green Moose will pay its supplier on the 50th day after the sale. As a result, Green Moose can decrease its nominal cost of trade credit by by paying late.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Green Moose Industries buys on terms of 2.5/15, net 45 from its chief supplier. Suppose Green Moose does not take advantage of the discount and the average. On average, Green Moose will pay its supplier on the 50th day after the sale. As a result, Green Moose can decrease its nominal cost of trade credit by by paying late.
Transcribed Image Text:Green Moose Industries buys on terms of 2.5/15, net 45 from its chief supplier. Suppose Green Moose does not take advantage of the discount and the average. On average, Green Moose will pay its supplier on the 50th day after the sale. As a result, Green Moose can decrease its nominal cost of trade credit by by paying late.
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