1- Assume the credit terms offered to your firm by your suppliers are 2.7/5, Net 30. Calculate the cost of the trade credit if your firm does not take the discount and pays on day 30.

The effective annual cost of the trade credit is?

2-Your supplier offers terms of 1.4/9,Net 45. What is the effective annual cost of trade credit if you choose to forgo the discount and pay on day 45

The effective annual cost of the trade credit is?

3-The Fast Reader Company supplies bulletin board services to numerous hotel chains nationwide. The owner of the firm is investigating the benefit of employing a billing firm to do her billing and collections. Because the billing firm specializes in these services, collection float will be reduced by16 days. Average daily collections are $1,100, and the owner can earn7% annually (expressed as an APR with monthly compounding) on her investments. If the billing firm charges $250 per month, should the owner employ the billing firm? The benefits are $ ?