Question
If a company purchases merchandise on terms of 1/10, n/30, the cash discount available is equivalent to what effective annual rate of interest (assuming a
If a company purchases merchandise on terms of 1/10, n/30, the cash discount available is equivalent to what effective annual rate of interest (assuming a 360 day year) ?
(the answer is 18%) I have seen the a formula for this is... 1% x ( 360 days / 20 days ) = 18%
My question is, why is 360 days being divided by the 20 days ? What does this represent or mean ?
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A Concise Course On Auditing An Authoritative Text For Stakeholders
Authors: Onyuka Felix McDubus
1st Edition
3844395415, 978-3844395419
