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Your firm has a re-investment rate of 7%. Further, your firm has just been offered trade...

Your firm has a re-investment rate of 7%. Further, your firm has just been offered trade credit terms of 1/15 net 30 for purchases made from a supplier. When should you repay the trade credit obligation?

a. on receipt

b. on day 15

c. on day 20

d. on day 30

Solutions

Expert Solution

The correct answer is Option D

Credit term - 1/15 net 30 represents that 1% discount will be allowed if the payment is made within 15 days otherwise the payment can be made upto 30 days without discount. Therefore, the correct answer is Option D.

jeff jeffy answered 2 years ago
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