Assume the credit terms offered to your firm by your suppliers are 3.3/4, Net 30. Calculate...
Assume the credit terms offered to your firm by your suppliers are 3.3/4, Net 30. Calculate the cost of the trade credit if your firm does not take the discount and pays on day 30.
Homework Answers
Solution:
Calculation of cost of trade credit:(assuming 360 days in a year)
=(Discount%/1-Discount %)*(360/Full aloowed paymet days-dicount days)
=[3.3%/(1-3.3%)]*(360/30-4)
=0.4725
=47.25%
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