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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%

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 8P: If a firm buys on terms of 3/15, net 45, but actually pays on the 20th day and still takes the...

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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%

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