Effective annual interest of trade discounts
Not what you're looking for?
Trade Credit Rates - What effect will the following actions have on the implicit interest rate charged to customers that pass up the cash discount? State the effective annual interest rate for these terms.
Discuss why a buyer would want to maybe borrow money to be able to take advantage of the cash discount terms rather than wait and pay the non discount invoice total when net is due.
a) the terms are changed to 1/10, net 20
b) the terms are changed to 1/10, net 30
c) the terms are changed to 1/5, net 10
d) the terms are changed to 2/10 Dec 10 net Dec 30, anticipation ½% per month
e) net 30
Purchase this Solution
Solution Summary
This explain the computation of effective annual interest of trade discounts with examples
Solution Preview
Annual Percentage Rate (APR) is an expression of the effective interest rate that will be paid on a loan, taking into account one-time fees and standardizing the way the rate is expressed. In other words the APR is the total cost of credit to the consumer expressed as an annual percentage of the amount of credit granted. APR is ...
Purchase this Solution
Free BrainMass Quizzes
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.
Income Streams
In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking
Learning Lean
This quiz will help you understand the basic concepts of Lean.