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4. Cost of trade credit Firms usually offer their customers some form of trade credit. This...
4. Cost of trade credit Aa Aa Firms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit, which will affect the actual cost of asset being sold for the buyer and the seller. Consider this case: Cold Duck Manufacturing Inc. buys most of its raw materials from a single supplier. This supplier sells to Cold Duck on terms of 2/15, net 60. The cost per period of the trade credit extended to...
10. Cost of trade credit Firms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit, which affect the cost of asset of sale for the buyer as well as the seller. Consider this case: Green Moose Industries buys on terms of 2.5/15, net 45 from its chief supplier. If Green Moose receives an invoice for $1,545.78, what would be the true price of this invoice? $1,582.50 $1,507.14 $1,205.71 $1,356.43 O $1,582.50 $1,507.14...
Cost of Trade Credit What are the nominal and effective costs of trade credit under the credit terms of 1/20, net 35? 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 2/15, 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 are the nominal and effective costs of trade credit under the credit terms of 3/20, 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 are the nominal and effective costs of trade credit under the credit terms of 3/15, 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: % ?
COST OF TRADE CREDIT AND BANK LOAN Lancaster Lumber buys $8 million of materials (net of discounts) on terms of 3/5, net 35; and it currently pays on the 5th day and takes discounts. Lancaster plans to expand, which will require additional financing. Assume 365 days in year for your calculations. If Lancaster decides to forgo discounts, how much additional credit could it obtain? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your...
COST OF TRADE CREDIT AND BANK LOAN Lancaster Lumber buys $8 million of materials (net of discounts) on terms of 3/5, net 30; and it currently pays on the 5th day and takes discounts. Lancaster plans to expand, which will require additional financing. Assume 365 days in year for your calculations. If Lancaster decides to forgo discounts, how much additional credit could it obtain? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your...
15.03 COST OF TRADE CREDIT AND BANK LOAN Lancaster Lumber buys $8 million of materials (net of discounts) on terms of 3/5, net 55; and it currently pays on the 5th day and takes discounts. Lancaster plans to expand, which will require additional financing. Assume 365 days in year for your calculations. If Lancaster decides to forgo discounts, how much additional credit could it obtain? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round...
COST OF TRADE CREDIT AND BANK LOAN Lancaster Lumber buys 58 million of materials (net of discounts) on terms of 3/5, net 70, and it currently pays on the 5th day and takes discounts, Lancaster plans to expand, which will regure additional financing. Assume 365 days in year for your calculations a. If Lancaster decides to forgo discounts, how much additional credit could your answer to the nearest cent. obtain? Write out your answer completely. For example, 5 million should...