Cost of Trade Credit Calculate the nominal annual cost of trade credit under each of the following terms. Assume a 365-day year. Do not round intermediate calculations. Round your answers to two decimal places.   1/15, net 20.  % 2/10, net 60.  % 3/10, net 50.  % 2/10, net 50.  % 2/15, net 40.  %

Q: Cost of Trade Credit Grunewald Industries sells on terms of 2/10, net 40. Gross sales last year…

A: Sale per day = $12,500 Discount sale = 0.5 ($12,500)                       = $6,250   Account…

Q: A credit card is advertised with an annual percentage rate (APR) of 24%. The advert also states that…

A: Effective annual rate is the annual interest rate for a nominal rate which is compounded multiple…

Q: If Hot Tubs Inc. had annual credit sales of P2,027,773 and its days sales outstanding was equal to…

A: The calculation of average Accounts Receivables outstanding is shown hereunder : Annual credit sales…

Q: Hail and Sons operates for 240 days in a year. It has been offered credit terms of 4/30 net 90 days.…

A: If company provide credit than it is cost to company so company provide discount to the customers to…

Q: Ricky Ripov's Pawn Shop charges an interest rate of 15 percent per month on loans to its customers.…

A: Effective annual rate = (1 + r)n - 1 r = interest rate per month n = number of months

Q: A company has net income of $195,000, a profit margin of 8.3 percent, and an accounts receivable…

A: Net Income = 195,000 Profit Margin = 8.3% Accounts Receivables = 134,370 Credit Sales = 70% of sales…

Q: What is LoGo's payables deferral period (DPO)?

A: Payables deferral period (DPO) = Accounts payable/Credit purchases per day It is the number of days…

Q: On a 365-day basis, using a trade credit terms of 2/10, net 30, and payment is made on the twentieth…

A: In case of trade credit, 2% discount is being given if payment is made till 10th day.

Q: Bank A advertises a money market account that pays 3.5% compounded quarterly. Bank B advertises a…

A: Annual percentage of Yeild = [{(1+r)n} - 1] Where, r = Interest per period N = Number of periods…

Q: Cost of Trade Credit What are the nominal and effective costs of trade credit under the credit…

A: The formula used is shown: DP= Discount Percentage P= Discount Period DCO= Days credit Outstanding

Q: On a 365-day basis, what is the rate per period of using trade credit if terms are 2/10, net 30, and…

A: On making payment till 10th day there is 2% discount. If payment is made between 11th till 30th day,…

Q: Calculate the nominal annual cost of trade credit under each of the following terms. Assume a…

A: Annual nominal cost of trade credit = Discount %/(100-Discount %) x (360/Allowed payment days –…

Q: Haumea has been offered credit terms of discount of four percent if paid within thirty days, if not…

A: When goods are sold on credit, the seller extends short term finance to the buyer to make the…

Q: Nominal cost of trade credit:   % Effective cost of trade credit

A: Nominal cost of trade credit is given by the following formula : = [(Discount % / 100 - Discount…

Q: 2/15, net 20 1/10, net 45 3/15, net 45 2/ 10, net 50 2/15, net 35

A: in this we have to use cost of trade credit  Cost of trade credit =Discount rate/(1-Discount rate )…

Q: Assuming a 365-day year, how long (in average days) does the collectibles from customers stay as…

A: Assuming a 365-day year, how long (in average days) does the collectibles from customers stay as…

Q: Calculate the nominal annual cost of trade credit under each of the following terms. Assume a…

A: Given:

Q: What are the nominal and effective costs of trade credit under the credit terms of 4/10, net 40?…

A: Given: 4/10, net 40. Number of days in a year = 365 ------------------------- 4/10, net 40 refers to…

Q: fers two credit terms to YVONE as follows: Credit term number 1: 2/15, net 30 C

A: A term that helps in indicating when the amount of payment is due for the sales and made on credit…

Q: A. Assume that all sales are on account. If sales revenue was $18,000,000 and the average days in…

A: Sales means the amount recorded in books as revenue earned by selling the goods or services. Account…

Q: Calculate the nominal annual cost of trade credit under each of the following terms. Assume a…

A: Trade discount is reduction of cost of goods or services provided. Normally trade discount given on…

Q: Assume the average management cost per account per year is $200 and the average fees earned per…

A: Average management cost per account per year= $200  Average fees earned per account per year= $170…

Q: On a 365-day basis, what is the effective annual rate of using trade credit if terms are 2/10, net…

A: If the payment is done in 10th day, the discount is given for 2 else full payment is required if…

Q: The major supplier of SS Corp. offers credit terms of 2/10, n / 35 What is the net benefit (in rate…

A: If the payment is made within 10 days the recipient will get a 2% discount and if the payment is…

Q: Suppose that Dunn Industries has annual sales of $2.3 million, cost of goods sold of $1,650,000,…

A: The question is based on the concept of calculation of operating cycle of a firm, Formula as,

Q: Mark's Manufacturing's average age of accounts receivable is 45 days, the average age of accounts…

A: The answer states the computation of cash conversion cycle

Q: What is the net benefit (in rate or percent) of paying on the 35th day instead of obtained a loan…

A: Credit term refers to a method used by the firms to encourage buyer or debtor to pay the amount of…

Q: be credit sales at terms n/30. National estimates that a proposed relaxatio om 30 days to 45 days.…

A: The answer is stated below:

Q: %

A: rnom = [Discount % / 1 - Discount % ]  * [ 365 days/ Days credit is outstanding - Discount Period]…

Q: (Annual Percentage Yield) Compute the cost of the following trade credit terms using the compounding…

A: Trade credit will be offered by suppliers to attract more customers. Customers who avail this credit…

Q: ​(Annual percentage yield​) Compute the cost of the following trade credit terms using the…

A: Effective annual rate/annual percentage yield is the cost of trade credit with compounding formula.…

Q: Nominal cost of trade credit:   % Effective cost of trade credit:   %

A: Nominal cost of trade credit = = [(Discount % / 100 - Discount %) *(365 / (Days credit outstanding -…

Q: Cost of Trade Credit What are the nominal and effective costs of trade credit under the credit…

A: Formula  for  Nominal cost of credit  = % of discount/(100- % of discount) × [365/(Full payment…

Q: nternational Industries sells on terms of 3/10, net 50. Gross sales last year were 5,662,500 and…

A: The calculation of gross and discounted sales has been made as follows: Gross Sales per day =Total…

Q: Cost of Trade Credit Calculate the nominal annual cost of trade credit under each of the following…

A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: On a 365-day basis, what is the rate per period of using trade credit if terms are 2/10, net 30, and…

A: Here, Credit Terms is 2/10 net 30 Payment is made on the 20th day Days in an year is 365

Q: Given the following, determine the gross of return after interest: Days inventory outstanding (DIO)…

A: Ratios are widely used by the companies to evaluate their company performance by comparing results…

Q: Zane Corporation has an inventory conversion period of 90 days, an average collection period of 34…

A: a. Cash conversion cycle = Inventory turnover day + Receivables day – Payables day

Q: Assume an effective compound interest rate i = 3% per annum. Compute the following equivalent rates.…

A: Effective annual rate is the interest actually earned on the investment or paid on the loan, as a…

Q: The Malibu Corporation has annual credit sales of $28 million. The average collection period is 30…

A: Day sales in receivables= 365/receivables turnover 30 =365/ receivables turnover receivables…

Q: The present rate for deutsche marks per dollar is 1.79 and 90-day forward rate is 1.78. Compute the…

A: The annualized forward discount rate is the rate at which the forward price of a currency is less…

Q: wages payable 90,000 Short-term loans payable 50,000 During the year, Arnn had net sales of $2.45…

A: The computation of Current ratio, Acid test ratio, Accounts Receivables turn over ratio, Accounts…

Q: 15. Noreen Company provided the following information for 2020: Accounts receivable - January 1…

A: Amortized cost of Accounts receivable = Ending Accounts receivable - Estimated uncollectible…