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    Terms of Trade Credit

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    Which of the following terms of trade credit is the more expensive?

    a. A 3 percent cash discount if paid on the 15th day with bill due on the 45th day (3/15, net 45)

    b. A 2 percent cash discount if paid on the 10th day with bill due on the 30th day (2/10, net 30)

    Please illustrate results. Thank you.

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    Year 2
    Terms of trade credit
    Which of the following terms of trade credit is the more expensive?
    Let's say that our purchase was for $1000.00:

    a. A 3 percent cash discount if paid on the 15th day with bill due on the 45th day (3/15, net 45).
    This means that you purchase an item for $1000.00 on credit. You have 45 days to pay your amount in full, ...

    Solution Summary

    This solution explains which of the two terms of trade credit is the more expensive.

    $2.19

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