Firms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit, which affect the cost of asset of sale

for the buyer as well as the seller.

Consider this case:

Purple Turtle Group buys most of its raw materials from a single supplier. This supplier sells to Purple Turtle on terms of $\frac{2}{15},$ net $60.$

The cost per period of the trade credit extended to Purple Turtle, rounded to two decimal places, is

Sources of short$-$term financing

Short$-$term credit, or short$-$term financing, is any liability that is scheduled for repayment within one year. Among the sources of short$-$term funds are

banks, suppliers, securities firms, and insurance companies. Their securities $($or obligations$)$ can take the form of bank loans, trade credit, commercial

paper, and accruals. Some types of short$-$term financing are easier to obtain and manage than others. Financial managers should consider the costs of

the various sources of financing as part of a business's cash management strategy.

The following statement refers to a source of short$-$term credit. Select the best term to complete the following sentence:

When resources are used and the payment for those resources is delayed, the result is the spontaneous creation of short$-$term

Sources of short$-$term financing

Short$-$term credit, or short$-$term financing, is any liability that is scheduled for repayment within one year. Among the sources of short$-$term funds are

banks, suppliers, securities firms, and insurance companies. Their securities $($or obligations$)$ can take the form of bank loans, trade credit, commercial

paper, and accruals. Some types of short$-$term financing are easier to obtain and manage than others. Financial managers should consider the costs of

the various sources of financing as part of a business's cash management strategy.

The following statement refers to a source of short$-$term credit. Select the best term to complete the following sentence:

When resources are used and the payment for those resources is delayed, the result is the spontaneous creation of short$-$term