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5 Required: a) A supplier has offered your company trade credit terms of 1/5, net 30. Interpret the terms of credit. 11 mark) b) Your
5 Required: a) A supplier has offered your company trade credit terms of 1/5, net 30. Interpret the terms of credit. 11 mark) b) Your company estimated the effective annual rate offered by one of its suppliers to be 10% p.a.. What does the EAR represent? The firm can obtain a bank loan at 8% EAR. As CFO, how would you advise the firm to pay this supplier? Explain. [2 marks] c) What is a currency forward contract? Why do multinational firms use such contracts? [3 marks) - (Type your answer into the answer box, NOT into the Notes box; uploading file is NOT accepted] A- B U X2 x? a E E ABC 123 D 14 or 14
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