Q:

Problem 16-9 Cost of Trade Credit

Grunewald Industries sells on terms of 3/10, net 30. Gross sales last year were $4,068,500, and accounts receivable averaged $430,500. Half of Grunewald's customers paid on the 10th day and took discounts. What are the nominal and effective costs of trade credit to Grunewald's nondiscount customers? (Hint: Calculate sales/day based on a 365-day year; then get average receivables of discount customers; then find the DSO for the nondiscount customers.) Do not round intermediate calculations. Round your answers to two decimal places.

Nominal cost	%
Effective cost	% Please show work so I can review - I submitted once and did not get the right answer.