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: Blue Wren Group buys most of its raw materials from a single supplier. This supplier sells to Blue Wren on terms of 2/15, net 45. The cost per period of the trade credit extended to Blue Wren, rounded to two decimal places, is Blue Wren's trade credit has a nominal annual cost-expressed as an annual percentage rate (APR) of (Note: Round all intermediate calculations to four decimal places, and your final answer to two decimal places.) , assuming a 360-day year. If Blue Wren's supplier shortens the discount period to five days, this will the cost of the trade credit. = credit. This allowance 1.96% th certain terms of credit. These term 2.04% 2.12% 2.20% a single supplier. This s Alls to Blue Wren on terms of 2/15, ne two decimal places, is ass expressed as an annual percentage rate (APR)-of ecimal places, and your final answer to two decimal places.) the cost of the trade credit. to five days, this will Grade It Now ce comes with certain terms of credit. These terms will affect the cos 23.99% 24.48% is supplier sells to Blue Wren 25.46% 2/15, net 45. The cost per , is 27.42% assuming a 360-day y cual percentage rate (APR)-of our final answer to two decimal places.) the cost of the trade credit. Save & Cont Grade It Now Continue witho of trade credit. This allowance comes with certain terms s from a single supplier. This supplier sells to Blue Wren nded to two decimal places, is cost-expressed as an ann increase ge rate (APR)-of Four decimal places, and yo ver to two decima decrease the cost of the period to five days, this will