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Cost of Trade Credit Calculate the nominal annual cost of trade credit under each of the...

Cost of Trade Credit

Calculate the nominal annual cost of trade credit under each of the following terms. Assume a 365-day year. Do not round intermediate calculations. Round your answers to two decimal places.

  1. 1/15, net 30.

      %

  2. 2/10, net 60.

      %

  3. 3/10, net 55.

      %

  4. 2/10, net 55.

      %

  5. 2/15, net 35.

      %

Solutions

Expert Solution

a) 1/15, net 30

1% discount if paid within 15 days

Allowed payment days = 30

b. 2/10, net 60

c. 3/10, net 55

d. 2/10, net 55

e. 2/15, net 35

jeff jeffy answered 1 year ago
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