Calculate the nominal cost of nonfree trade credit under each of the following terms. Assume payment is made either on the due date or on the discount date.
a. 1/15, net 20
b. 2/10, net 60
c. 3/10, net 45
d. 2/10, net 45
e. 2/15, net 40.
Please see attached file for answers.
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Cost of trade credit is exemplified in the solution.