Trade Credit

$8.$ Assume the credit terms offered to your firm by your suppliers are $\frac{3}{5},$ Net $30.$ Cliculite to cost of the trade credit if your firm does not take the discount and pays on dy $39.$

$6.$ Your supplier offers terms of $\frac{1}{10},$ Net $45.$ What is the effective annual cost of trade creditifyue choose to forgo the discount and pay on day $45?$

The Fast Reader Company supplies bulletin board services to numerous hotel chains nationwide. The owner of the firm is investigating the benefit of employing a billing firm to do her billing and collections. Because the billing firm specializes in these services, collection flout will be reduced by $20$ days. Average daily collections are $21,200,$ and the owner can earn $8\%$ anmaally $($expressed as an APR with monthly compounding$)$ on her investments. If the tilling firm charges $250$ per month, should the owner employ the billing firm?

The Samarth Corporation is trying to decide whether to switch to a bank that will accommadate electronic funds transfers from Samarth's customers. Samarth's financial manager believe the new system would decrease its collection float by as much as five days. The new bank would require a compensating balance of $30,000,$ whereas its present bank bas no compenang baance requirement. Samarth's average daily collections are $10,000,$ and it can euro $8$:$8$ ca is shors$-$cerm investments, Should Samarth make the switch? $($Assume the compensang blanct $=$ the suew bank will be deposited in a non$-$interest$-$earning account.$)$