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A company gets trade credit from its supplier. The company purchases $1000 of goods. It receives terms 2/15, net 35 days. What will they pay
A company gets trade credit from its supplier. The company purchases $1000 of goods.
- It receives terms 2/15, net 35 days.
- What will they pay in 5 days? (2 marks)
- Using the formula, k=d%/(100%-d%) x 365/(f(date) d(date)) calculate the annual cost of not taking the discount. (2 marks)
- Calculate the annual cost of not taking the discount for the following options and pick the better option for the company and explain why. (4 marks)
- 2/10, net 20
- 2/10, net 40
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