Provide Answer 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? (365 in year)Answer: 43.45%

Nominal cost of trade credit = ((Discount rate)/(1-Discount rate))*((365/(Payment period-Discount…

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?
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 is the nominal cost of trade credit if
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
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: %
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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%
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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

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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) Answer: 43.45%