Question 36 A company has daily purchases of $10,000 from its supplier. The supplier offers trade credit under the following terms: 3/20, net 50 days. The company finally chooses to pay on time (pay...


Question 36




A company has daily purchases of $10,000 from its supplier.  The supplier offers trade credit under the following terms:  3/20, net 50 days.  The company finally chooses to pay on time (pay in the 50th day) but not to take the discount. We assume 365 days per year. What is the average level of the company’s free trade credit? ______




























$30,000





$170,000





$200,000





$300,000




Question 37




Based on the information from Question 36, what is the average level of the company’s total trade credit?




























$170,000





$200,000





$300,000





$500,000





38 . Based on the information from Question 36, what is the average level of the company’s costly trade credit?




























$170,000





$200,000





$300,000





$500,000




Question 39




Based on the information from Question 36, what is the nominal annual cost of the firm’s costly trade credit?




























28.6%





29.3%





33.5%





37.6%





Based on the information from Question 36, what is the effective annual cost of the firm’s costly trade credit?




























35.8%





37.6%





39.5%





44.9%








Jun 10, 2022
SOLUTION.PDF

Get Answer To This Question

Related Questions & Answers

More Questions »

Submit New Assignment

Copy and Paste Your Assignment Here