17 Terms of Sale A firm offers terms of 2/9, net 40. What effective annual interest rate...

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17 Terms of Sale A firm offers terms of 2/9, net 40. What effective annual interest rate does the firm earn when a customer does not take the discount? Without doing any calculations, explain what will happen to this effective rate if:

(a) The discount is changed to 3 per cent

(b) The credit period is increased to 60 days

(c) The discount period is increased to 15 days.

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Corporate Finance

ISBN: 9781526848093

4th Edition

Authors: David Hillier

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