(16–7)

Cost of Trade Credit Calculate the nominal annual cost of nonfree trade credit under each of the following terms. Assume that payment is made either on the discount date or on the due 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