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    Working Capital Management: "Free" Trade Credit Calculation

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    Filbeck Company (Buskirk Construction) buys on terms of 2/15, net 30 days. It does not take discounts, and it typically pays 30 days after the invoice date. Net purchases amount to $500,000 per year. On average, how much "free" trade credit does the firm receive during the year? (Assume a 365-day year.)

    A. $20,548
    B. $21,575
    C. $22,654
    D. $23,787
    E. $24,976

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    https://brainmass.com/business/working-capital-management/working-capital-management-free-trade-credit-calculation-146824

    Solution Summary

    Filbeck Company (Buskirk Construction) buys on terms of 2/15, net 30 days. It does not take discounts, and it typically pays 30 days after the invoice date. Net purchases amount to $500,000 per year. On average, how much "free" trade credit does the firm receive during the year? (Assume a 365-day year.)

    $2.49

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