Assume the credit terms offered to your firm by your suppliers are 3/15, net 60. Calculate...
Assume the credit terms offered to your firm by your suppliers
are 3/15, net
60. Calculate the cost of the trade credit if your firm does not
take the discount and pays on day 60.
the cost of trade credit is ____%
Homework Answers
Answer- Cost of credit = 3.09%
Explanation- Total net days = 60 days-15 days
= 35 days
No. of periods = 365 days/35 days
= 10.4 periods
Lets say total amount should be paid =$100
Rate of discount = 3%
Total amount paid after discount = $97
Cost of credit = ($3/$97)*100
= 3.09%
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