7-10. A firm purchases 4,000 items per day at a list price of $18 per item. The credit terms are 4/10, net 40. 7. Find the free trade credit. a) $594,100 b) $756,300 c) $628,400 d) $691,200 8. Find the costly trade credit. a) $2,285,400 b) $2,073,600 c) $2,065,300 d) $2,248,200 9. Find the nominal annual cost of trade credit. a) 46.88% b) 53.74% c) 50.69% d) 58.92% 10. Suppose that the firm can borrow from a local bank at an interest rate of 20%. Which of the following decisions should be made? a) Borrow, take the discount, and make the payment within 10 days. b) Give up the discount and take the net 40 days