That customer forego the discount and pay on the 45th day? What is the nominal cost of trade creditif the terms are 4/10, net 45 assumingthat customers forego the discount andpay on the 45th day? (360 in year)

1. Understand the Terms4/10: This means that the buyer can receive a 4% discount if the invoice is…

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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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?
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
What is the effective cost of trade credit under the credit terms of 3/10, net 45? Assume 365 days in a year for your calculations. Round your answers to two decimal places. Do not round intermediate calculations.
What is the effective cost of trade credit under the credit terms of 2/15, net 40? Assume 365 days in a year for your calculations. Round your answers to two decimal places. Do not round intermediate calculations. Ans
What is the effective cost of trade credit under the credit terms of 2/15, net 40? Assume 365 days in a year for your calculations. Round your answers to two decimal places. Do not round intermediate Answer this question
What is the nominal cost?
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?
(Related to Checkpoint 18.2) (Evaluating trade credit discounts) If a firm buys on trade credit terms of 5/15, net 90 and decides to forgo the trade credit discount and pay on the net day, what is the annualized cost of forgoing the discount (assume a 365-day year)? The annualized cost of the trade credit terms of 5/15, net 90 is %. (Round to two decimal places.)
What is the effective cost of trade credit under the credit terms of 2/15, net 40? Assume 365 days in a year for your calculations. Round your answers to two decimal places. Do not round intermediate calculations. Provide answer
On a 365-day basis, what is the rate per period of using trade credit if terms are 2/10, net 30, and payment is made on the twentieth day? * 104% 2.04% 109% 10% 1.09% On a 365-day basis, what is the effective annual rate of using trade credit if terms are 2/10, net 30, and payment is made on the twentieth day? * 1.09% 2.04% 109% 10% 104%
What is the effective cost of trade credit under the credit terms of 2/15, net 40? Assume 365 days in a year for your calculations. Round your answers to two decimal places. Do not round intermediate calculations. give me Answer
What is the effective cost??

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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? (360 in year)