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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

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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 on terms of 3/20, net 45 from its chief supplier. If Purple Turtle receives an invoice for $1, 889.99, what would be the true price of this invoice? $1, 283.30 $1, 558.30 $1, 833.29 $1, 466.63 The nominal annual cost of the trade credit extended by the supplier is Suppose Purple Turtle does not take advantage of the discount and then chooses to pay its supplier late-so that on average, . On average, Purple Turtle will pay its supplier on the 50th day after the sale. As a result, Purple Turtle can decrease its nominal cost of trade credit by by paying late

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