Question

Cost of Trade Credit Calculate the nominal annual cost of trade credit under each of the...

Cost of Trade Credit

Calculate the nominal annual cost of trade credit under each of the following terms. Assume a 365-day year. Do not round intermediate calculations. Round your answers to two decimal places.

  1. 1/15, net 25.

      %

  2. 2/10, net 50.

      %

  3. 3/10, net 55.

      %

  4. 2/10, net 55.

      %

  5. 2/15, net 45.

      %

Homework Answers

Answer #1

Please give positive vote , let me know if you need any further information regaring the question

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Cost of Trade Credit What are the nominal and effective costs of trade credit under the...
Cost of Trade Credit What are the nominal and effective costs of trade credit under the credit terms of 1/15, net 30? Assume a 365-day year. Do not round intermediate calculations. Round your answers to two decimal places. Nominal cost of trade credit: % Effective cost of trade credit: %
Cost of Trade Credit What are the nominal and effective costs of trade credit under the...
Cost of Trade Credit What are the nominal and effective costs of trade credit under the credit terms of 2/20, net 30? Assume a 365-day year. Do not round intermediate calculations. Round your answers to two decimal places. Nominal cost of trade credit: % Effective cost of trade credit: %
What are the nominal and effective costs of trade credit under the credit terms of 1/20,...
What are the nominal and effective costs of trade credit under the credit terms of 1/20, net 35? Assume a 365-day year. Do not round intermediate calculations. Round your answers to two decimal places. Nominal cost of trade credit:   % Effective cost of trade credit:   %
Cost of Trade Credit A large retailer obtains merchandise under the credit terms of 2/15, net...
Cost of Trade Credit A large retailer obtains merchandise under the credit terms of 2/15, 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 a 365-day year. Do not round intermediate calculations. Round your answer to two decimal places.
1. Calculate the nominal annual cost of trade credit under each of the following terms. Assume...
1. Calculate the nominal annual cost of trade credit under each of the following terms. Assume a 365-day year. Do not round intermediate calculations. Round your answers to two decimal places. 1/15, net 25.   % 2/10, net 55.   % 3/10, net 45.   % 2/10, net 45.   % 2/15, net 40.   % 2. Dorothy Koehl recently leased space in the Southside Mall and opened a new business, Koehl's Doll Shop. Business has been good, but Koehl frequently runs out of cash....
Cost of Trade Credit A large retailer obtains merchandise under the credit terms of 1/20, net...
Cost of Trade Credit A large retailer obtains merchandise under the credit terms of 1/20, net 30, 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. %
Problem 16-04 Cost of Trade Credit A large retailer obtains merchandise under the credit terms of...
Problem 16-04 Cost of Trade Credit A large retailer obtains merchandise under the credit terms of 3/20, 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. %
Problem 16-09 Cost of Trade Credit Grunewald Industries sells on terms of 3/10, net 30. Gross...
Problem 16-09 Cost of Trade Credit Grunewald Industries sells on terms of 3/10, net 30. Gross sales last year were $4,477,500 and accounts receivable averaged $412,500. Half of Grunewald's customers paid on the 10th day and took discounts. What are the nominal and effective costs of trade credit to Grunewald's nondiscount customers? (Hint: Calculate daily sales based on a 365-day year, calculate the average receivables for discount customers, and then find the DSO for the nondiscount customers.) Do not round...
Firms usually offer their customers some form of trade credit. This allowance comes with certain terms...
Firms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit. These terms will affect the cost of the asset for both the buyer and the seller. Consider the following case: Blue Elk Manufacturing buys most of its raw materials from a single supplier. This supplier sells to Blue Elk on terms of 2/15, net 45. The cost per period of the trade credit extended to Blue Elk, rounded to two decimal places,...
Firms usually offer their customers some form of trade credit. This allowance comes with certain terms...
Firms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit. These terms will affect the cost of the asset for both the buyer and the seller. Consider the following case: Blue Elk Manufacturing buys most of its raw materials from a single supplier. This supplier sells to Blue Elk on terms of 2/15, net 45. The cost per period of the trade credit extended to Blue Elk, rounded to two decimal places,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT