5. Cost of trade credit Firms usually offer their customers some form of trade credit. This allowance comes with certain Consider this case: Purple Turtle Group buys on terms of 1.5/15, net 60 from its chief supplier If Purple Turtle receives an invoice for $856.75, what would be the true price of this invoice? $632.92 $675.12 $886.10 $843.90 (Note: The nominal annual cost of the trade credit extended by the supplier is 12.33% Assume there are 365 days in a year.) The effective annual rate of interest on trade credit is Suppose Purple Turtle does not take advantage of the discount and then chooses to pay its supplier late-so that on average, Purple Turtle will pay its supplier on the 65th day after the sale. As a result, Purple Turtle can decrease its nominal cost of trade credit by % by paying late