Suppose the credit terms offered to your firm by its suppliers are 2/10, net 30 days....
Suppose the credit terms offered to your firm by its suppliers are 2/10, net 30 days. Your firm is not taking discounts, but is paying after 22 days instead of Day 30. You point out that the nominal cost of not taking the discount and paying on Day 30 is approximately 37%. But since your firm is neither taking discounts nor paying on the due date, what is the effective annual percentage cost (not the nominal cost) of its costly trade credit, using a 365-day year?
a. 77.2%
b. 78.9%
c. 70.4%
d. 88.3%
e. 84.9%
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Suppose the credit terms offered to your firm by its suppliers are 2/10, net 30 days....
Assume the credit terms offered to your firm by your suppliers are 2.9/5, Net 30. Calculate...
Assume the credit terms offered to your firm by your suppliers are 2.9/5, Net 30. Calculate the cost of the trade credit if your firm does not take the discount and pays on day 30. The effective annual cost of the trade credit is _____%. (Round to two decimal places.)
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.
Assume the trade credit terms offered to your firm by your suppliers are 3/5, Net 30....
Assume the trade credit terms offered to your firm by your suppliers are 3/5, Net 30. Calculate the cost of the trade credit (effective annual rate) from day 5 until day 30 when you paid. 25.37% 55.94% 29.30% 21.61%
Show in Excel please! A firm buys on terms of 2/8, net 45 days, it does...
Show in Excel please!
A firm buys on terms of 2/8, net 45 days, it does not take discounts, and it actually pays after 58 days. What is the effective annual percentage cost of its non-free trade credit? (Use a 365-day year.) Terms of trade 2/8, net 45 discount% discount days days of credit Nominal cost of trade credit Days of costly credit Effective cost of trade credit
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 ____%
A firm buys on terms of 2/8, net 45 days, it does not take discounts, and it actually pays after 58 days
A firm buys on terms of 2/8, net 45 days, it does not take discounts, and it actually pays after 58 days. What is the effective annual percentage cost of its non-free trade credit? (Use a 365-day year.)
A large retailer obtains merchandise under the credit terms of 2/15, net 30, but routinely takes...
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.
Blueroot Inc. is considering a change in its financing policy. Currently, it uses maximum trade credit...
Blueroot Inc. is considering a change in its financing policy. Currently, it uses maximum trade credit by not taking discounts on its purchases. The standard industry credit terms offered by all its suppliers are 2/10 net 30 days, and the firm pays on time. The new CFO is considering borrowing from its bank, using short-term notes payable, and then taking discounts. The firm wants to determine the effect of this policy change on its net income. Its net purchases are...
Trade Credit The Thompson Corporation projects an increase in sales from $1 million to $3 million...
Trade Credit The Thompson Corporation projects an increase in sales from $1 million to $3 million, but it needs an additional $300,000 of current assets to support this expansion Thompson can finance the expansion by no longer taking discounts, thus increasing accounts payable. Thompson purchases under terms of 1/10, net 30, but it can delay payment for an additional 35 days paying in 65 days and thus becoming 35 days past due without a penalty because of its suppliers currently...
A firm buys on terms of 2/8, net 45 days, it does not take discounts, and...
A firm buys on terms of 2/8, net 45 days, it does not take discounts, and it actually pays after 85 days. What is the effective annual percentage cost of its non-free trade credit? (Use a 365-day year.) a. 10.55% b. 10.05% c. 8.64% d. 9.55% e. 7.84%
Assume the trade credit terms offered to your firm by your suppliers are 3/5, Net 30. Calculate the cost of the trade credit (effective annual rate) from day 5 until day 30 when you paid. 25.37% 55.94% 29.30% 21.61%
Show in Excel please!
A firm buys on terms of 2/8, net 45 days, it does not take discounts, and it actually pays after 58 days. What is the effective annual percentage cost of its non-free trade credit? (Use a 365-day year.) Terms of trade 2/8, net 45 discount% discount days days of credit Nominal cost of trade credit Days of costly credit Effective cost of trade credit
Trade Credit The Thompson Corporation projects an increase in sales from $1 million to $3 million, but it needs an additional $300,000 of current assets to support this expansion Thompson can finance the expansion by no longer taking discounts, thus increasing accounts payable. Thompson purchases under terms of 1/10, net 30, but it can delay payment for an additional 35 days paying in 65 days and thus becoming 35 days past due without a penalty because of its suppliers currently...
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