Question

A firm offers credit terms of 1/15, net 45. What is the APR on the credit...

A firm offers credit terms of 1/15, net 45. What is the APR on the credit extended if a customer foregoes the discount on a $1000 purchase?

Homework Answers

Answer #1

­SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

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
A supplier to your firm offers credit terms of 2/15 net 45 however, your firm never...
A supplier to your firm offers credit terms of 2/15 net 45 however, your firm never takes advantage of the discount but instead always pays full price on day 45. Your finance intern claims that your firm would be better off borrowing money from an existing but little used line of credit at a current annualized rate of 8%, pay the firm providing credit at the end of the discount period (day 15) and to then repay the line of...
A supplier to your firm offers credit terms of 2/15 net 45 however, your firm never...
A supplier to your firm offers credit terms of 2/15 net 45 however, your firm never takes advantage of the discount but instead always pays full price on day 45. Your finance intern claims that your firm would be better off borrowing money from an existing but little used line of credit at a current annualized rate of 8%, pay the firm providing credit at the end of the discount period (day 15) and to then repay the line of...
A firm offers credit terms of 3/10, net 35. What is the effective annual rate on...
A firm offers credit terms of 3/10, net 35. What is the effective annual rate on the credit extended if a customer foregoes the discount on a $10,000 purchase? Assume that there are 365 days in one year. (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit the % sign in your response. For example, an answer of 15.39% should be entered as 15.39.)
Dome Metals has credit sales of $396,000 yearly with credit terms of net 45 days, which...
Dome Metals has credit sales of $396,000 yearly with credit terms of net 45 days, which is also the average collection period. a. Assume the firm offers a 3 percent discount for payment in 18 days and every customer takes advantage of the discount. Also assume the firm uses the cash generated from its reduced receivables to reduce its bank loans which cost 10 percent. What will the net gain or loss be to the firm if this discount is...
A firm offers terms of 1/10, net 30. What effective annual interest rate does the firm...
A firm offers terms of 1/10, net 30. What effective annual interest rate does the firm earn if the discount period is increased to 15 days?
Dome Metals has credit sales of $396,000 yearly with credit terms of net 45 days, which...
Dome Metals has credit sales of $396,000 yearly with credit terms of net 45 days, which is also the average collection period. Assume the firm adopts new credit terms of 3/18, net 45 and all customers pay on the last day of the discount period. Any reduction in accounts receivable will be used to reduce the firm's bank loan which costs 10 percent. The new credit terms will increase sales by 15% because the 3% discount will make the firm's...
If a firm buys on trade credit terms of 5​/15​, net 75 and decides to forgo...
If a firm buys on trade credit terms of 5​/15​, net 75 and decides to forgo the trade credit discount and pay on the net​ day, what is the annualized cost of forgoing the discount​ (assume a​ 365-day year)?
Dome Metals has credit sales of $396,000 yearly with credit terms of net 45 days, which...
Dome Metals has credit sales of $396,000 yearly with credit terms of net 45 days, which is also the average collection period. Assume the firm adopts new credit terms of 3/18, net 45 and all customers pay on the last day of the discount period. Any reduction in accounts receivable will be used to reduce the firm's bank loan which costs 10 percent. The new credit terms will increase sales by 15% because the 3% discount will make the firm's...
A firm offers terms of 1/10, net 35. a. What effective annual interest rate does the...
A firm offers terms of 1/10, net 35. a. What effective annual interest rate does the firm earn when a customer does not take the discount? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What effective annual interest rate does the firm earn if the discount is changed to 2 percent? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places,...
Your primary supplier offers you the following terms of credit:2/15 net 60What is the effective Annual...
Your primary supplier offers you the following terms of credit:2/15 net 60What is the effective Annual Percentage Rate of interest if you forego the early payment discount?