7. Cost of trade credit Firms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit. These terms will affect the cost of the asset for both the buyer and the seller. Consider the following case: Happy Frog Inc. buys most of its raw materials from a single supplier. This supplier sells to Happy Frog on terms of 3/15, net 45. The cost per period of the trade credit extended to Happy Frog, rounded to two decimal places, is 3.09% , assuming a 365-day year. Happy Frog's trade credit has a nominal annual cost-expressed as an annual percentage rate (APR)-of 37.60% (Note: Round all intermediate calculations to four decimal places, and your final answer to two decimal places.) If Happy Frog's supplier shortens the discount period by five days, this will decrease the cost of the trade credit. 7. Cost of trade credit Firms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit. These terms will affect the cost of the asset for both the buyer and the seller. Consider the following case: Happy Frog Inc. buys most of its raw materials from a single supplier. This supplier sells to Happy Frog on terms of 3/15, net 45. The cost per period of the trade credit extended to Happy Frog, rounded to two decimal places, is 3.09% , assuming a 365-day year. Happy Frog's trade credit has a nominal annual cost-expressed as an annual percentage rate (APR)-of 37.60% (Note: Round all intermediate calculations to four decimal places, and your final answer to two decimal places.) If Happy Frog's supplier shortens the discount period by five days, this will decrease the cost of the trade credit