Geo-M is considering adding cash discount to its credit terms. If Geo-M offers 3/11 net 30 rather than its current net 30 policy, what annualized rate is the company charging customers who do not take the discount? Assume a 365-day year.
annualized rate the company is charging = discount / (1- discount) * 365 /( net days -discount days)
=> 0.03 / (1-0.03) *365 /(30-11)
=>0.59414008.
=>59.41%
Geo-M is considering adding cash discount to its credit terms. If Geo-M offers 3/11 net 30...
Geo-M is considering adding a cash discount to its credit terms. If Geo-M offers 3/11 net 30 rather than its current net 30 policy, what annualized rate is the company charging customers who do not take the discount? Assume a 365-day year.
8. Geo-M is considering adding a cash discount to its credit terms. If Geo-M offers 3 / 11 net 30 rather than its current net 30 policy, what annualized rate is the company charging customers who do not take the discount? Assume a 365-day year.
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