A. If a firm buys under terms of 3/15, net 45, but actually pays on the 20th day and still takes the discount, what is the nominal cost of its nonfree trade credit?
b. Does it receive more less credit than it would if it paid within 15 days?© BrainMass Inc. brainmass.com October 17, 2018, 1:40 am ad1c9bdddf
The formula to calculate Nominal rate of trade credit is
Nominal rate of trade credit = Discount %/(1 - Discount %) * ...
The solution computes the nominal cost of trade credit.
Computing the Nominal Cost of Trade Credit
A certain firm grants trade credit with terms of 2/10, net 30.
What is the nominal cost of trade credit to a customer who pays on the due date? Set calculator to four decimal places to obtain the percentage answer to two decimal places
What is the nominal cost of trade credit to the customer above who stretches the payables to 45 days?View Full Posting Details