None What is the nominal cost of trade credit ifthe terms are 3/10, net 40 assuming thatcustomers forego the discount and pay onthe 40th day?a) 35.9%b) 36.4%c) 37.6%d) 38.2%

Explanation of Trade Credit Terms: Trade credit terms such as "3/10, net 40" outline the conditions…

Answered: What is the nominal cost of trade…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter16: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 8P

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Captain Whitman Ship Supplies offers terms of 3/15, net 45. If a purchaser takes the discount and pays on the 10th day, what is the nominal cost of trade credit? Now suppose a purchaser actually pays on the 20th day but still takes the discount. What is the actual nominal cost of the trade credit?
If a firm buys on terms of 3/15, net 45, but actually pays on the 20th day and still takes the discount, what is the nominal cost of its nonfree trade credit? Does it receive more or less credit than it would if it paid within 15 days?
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What is the nominal cost of trade credit if the terms are 4/10, net 45 assuming that customers forego the discount and pay on the 45th day? (365 in year) Need solution
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What are the nominal and effective costs of trade credit under the credit terms of 2/20, net 40? Assume a 365-day year. Do not round intermediate calculations. Round your answers to two decimal places. Nominal cost of trade credit: % Effective cost of trade credit: %
What is the nominal cost of trade credit if the terms are 4/10, net 45 assuming that customers forego the discount and pay on the 45th day? (365 in year) Financial Accounting
The approximate effective cost (EC) of financing the discount price of trade credit under terms 2/10, net/30 using a 360 day year is?
hat are the nominal and effective costs of trade credit under the credit terms of 2/20, net 40? Assume a 365-day year. Do not round intermediate calculations. Round your answers to two decimal places. Nominal cost of trade credit: % Effective cost of trade credit:
Cost of Trade Credit What are the nominal and effective costs of trade credit under the credit terms of 4/10, net 30? Assume a 365-day year. Do not round intermediate calculations. Round your answers to two decimal places. Nominal cost of trade credit: % Effective cost of trade credit: %

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What is the nominal cost of trade credit if the terms are 3/10, net 40 assuming that customers forego the discount and pay on the 40th day? a) 35.9% b) 36.4% c) 37.6% d) 38.2%