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: Green Moose Industries buys on terms of 2/15, net 45 from its principal supplier. If Green Moose receives an invoice for $1,254.98, then the true price of this invoice is $1,229.88 The supplier is willing to extend credit that exhibits a nominal annual cost of 24.82% Suppose Green Moose doesn't take the discount and instead chooses to pay its supplier five days' late-so that on average, Green Moose will pay its supplier on the 50th day after the date of sale. As a result, Green Moose can decrease its actual nominal cost of trade credit by by paying late