MANAGERIAL ACCOUNTING

the suppliers creult tells? (Assume a Sou-day year.) 9. Suppose the credit terms offered to your firm by your suppliers are 2/10, net 30 days. Out of convenience, your firm is not taking discounts, but is paying after 20 days, instead of waiting until Day 30. You point out that the nominal cost of not taking the discount and paying on Day 30 is around 37 percent. But since your firm is not taking discounts and is paying on Day 20, what is the effective annual cost of your firm's current practice, using a 360-day year? 10. ABC Company finances all of its seasonal inventory needs from the local bank at an effective interest cost of 9%. The firm's supplier promises to extend trade credit on terms that will match the 9% bank credit rate. What terms would the supplier have to offer (approximately)