Cost of Trade Credit
A large retailer obtains merchandise under the credit terms of 2/15, net 35, but routinely takes 55 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer's effective cost of trade credit? Assume 365 days in year for your calculations. Do not round intermediate calculations. Round your answer to two decimal places.
Calculate the effective cost of trade credit as follows:
Effective cost of credit = (1+ (Discount rate /(1 - Discount rate))^n - 1
Effective cost of credit = (1+(2%/(1-2%))^(365/(55-15)) - 1
Effective cost of credit =( 102.0408163265306%)^(365/40)) - 1
Effective cost of credit = 1.2024 -1
Effective cost of credit = 0.2024 or 20.24%.
Cost of Trade Credit
A large retailer obtains merchandise under the credit terms of 2/15, net 40, but routinely takes 65 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer's effective cost of trade credit? Assume a 365-day year. Do not round intermediate calculations. Round your answer to two decimal places.
Cost of Trade Credit A large retailer obtains merchandise under the credit terms of 2/15, net...
Problem 16-04 Cost of Trade Credit A large retailer obtains merchandise under the credit terms of 3/10, net 40, but routinely takes 55 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer's effective cost of trade credit? Assume 365 days in year for your calculations. Do not round intermediate calculations. Round your answer to two decimal places. %
A large retailer obtains merchandise under the credit terms of 2/15, net 40, but routinely takes 65 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer's effective cost of trade credit? Assume 365 days in year for your calculations. Do not round intermediate calculations. Round your answer to two decimal places.
Problem 16-04 Cost of Trade Credit A large retailer obtains merchandise under the credit terms of 3/10, net 40, but routinely takes 70 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer's effective cost of trade credit? Assume 365 days in year for your calculations. Do not round intermediate calculations. Round your answer to two decimal places.
A large retailer obtains merchandise under the credit terms of 2/15, net 30, but routinely takes 50 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer's effective cost of trade credit? Assume a 365-day year. Do not round intermediate calculations. Round your answer to two decimal places.
A large retailer obtains merchandise under the credit terms of 1/15, net 45, but routinely takes 65 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer's effective cost of trade credit? Assume 365 days in year for your calculations. Do not round intermediate calculations. Round your answer to two decimal places.
A large retailer obtains merchandise under the credit terms of 1/10, net 45, but routinely takes 60 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer's effective cost of trade credit? Assume 365 days in year for your calculations. Do not round intermediate calculations.
A large retailer obtains merchandise under the credit terms of 1/15, net 40, but routinely takes 50 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer's effective cost of trade credit? Assume a 365-day year. Do not round intermediate calculations. Round your answer to two decimal places.
A large retailer obtains merchandise under the credit terms of 1/10, net 30, but routinely takes 70 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer's effective cost of trade credit? Assume 365 days in year for your calculations. Do not round intermediate calculations. Round your answer to two decimal places.
A large retailer of teens merchandise under the credit terms of 3/10, net 30, but routinely takes 15 days to pay its bills. Because the retailer is an important customer, suppliers allows the firm to stretch it’s credit terms. What is the retailers affective costOf trade credit? Assume 365 days in a year for your calculations. Do not round intermediate calculations. Round your answers to two decimal places.
1.2. Receivables Investment Snider Industries sells on terms of 2/10, net 35. Total sales for the year are $500,000. Thirty percent of customers pay on the 10th day and take discounts; the other 70% pay, on average, 40 days after their purchases. Assume a 365-day year. a. What is the days sales outstanding? Do not round intermediate calculations. Round your answer to the nearest whole number. days b. What is the average amount of receivables? Do not round intermediate calculations....