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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Similar questions

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?
If your supplier offers 3/5 net 28, what is the implied interestrate if you choose to forgo the discount and pay on day 28?
Calculate the nominal annual cost of nonfree trade credit under each of the following terms. Assume that payment is made either on the discount date or on the due date. a. 1/15, net 20 b. 2/10, net 60 c. 3/10, net 45 d. 2/10, net 45 e. 2/15, net 40
If a credit card you are interested in has an APR of 21%, what would the Daily Periodic Rate (DPR) be? (choose all that are correct) 0.0575% ☐.0575 0.000575 5.75% 5.75 21%
# 17 If credit terms of "2/10, net 40" are offered, the approximate cost of not taking the discount and paying at the end of the credit period would be (Assume a 365-day year) Answer O 20.8 percent O 22.8 percent O 24.8 percent O 23.8 percent
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The expression “2/10, net 45” means that the customers receive a 2% discount if they pay within 10 days; otherwise, they must pay in full within 45 days. What would the seller's cost of capital have to be in order for the discount to be cost justified? 24.8571% 19.8571% 20.8571% 23.8571%
Suppose your credit card issuer states that it charges a 24.00% nominal annual rate, but you must make monthly payments, which amounts to monthly compounding. What is the effective annual rate? O a. 26.29% b. 31.12% O c. 29.51% d. 26.82% e. 21.19%
27) can i please get help?
5. If this loan had been made on a 10% add-on basis payable in 12 end-of-month installments, that would be the monthly payments? What is the annual percentage rate? The effective annual rate? ($45,833.33, 17.97%, 19.53%) E • How does the cost of costly trade credit generally compare with the cost of shortterm bank loans? L Focus F9 F10 F11 F12 8 9
Suppose your credit card issuer states that it charges a 17.00% nominal annual rate, but you must make monthly payments, which amounts to monthly compounding. What is the effective annual rate? a.16.08% b.16.88% c.15.27% d.17.72% e.18.39%
If the receivable turnover solving this question

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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