Question
If your firm buys $1,000 worth of supplies on credit with terms 3/15 n60 and pays the bill on the 60 th day after the
If your firm buys $1,000 worth of supplies on credit with terms 3/15 n60 and pays the bill on the 60th day after the purchase:
a. What is the approximate, or nominal, cost of trade credit as an annual rate?
b. What is the exact cost of trade credit as an annual rate?
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Fundamentals of Investment Management
Authors: Geoffrey Hirt, Stanley Block
10th edition
0078034620, 978-0078034626
