Accounts Payable Financing Trade Credit Project Trader Petes buys $6,000,000 (invoice price) of inventory from one of its vendors on terms of 3/10, net 40:

1. Trader Petes Gross Price is:

2. Trader Petes True Price is:

3. Trader Petes financing cost is:

4. Trader Petes Net Daily Payable (NDP)cost is:

5. Trader Petes Total Trade Credit is:

6. Trader Petes Free Trade Credit is:

7. Trader Petes Costly Trade Credit is:

8. Show Work using the Costly Trade Credit Formula the cost rate is:

9. Show Work Using the Approximate Cost Formula the cost rate is:

10. Trader Petes Effective Annual Rate (EAR) is: