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