If a firm buys on term of 3/15, net 45, what is the APR of it's non-free trade credit? What is the effective annual rate?
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Q: A firm is offered trade credit terms of 3/15, net 45 days. The firm does not take the discount, and…
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Q: .A firm is offered trade credit terms of 3/15, net 30 days. The firm does not take the discount, and…
A: solution given credit terms =3/15 net 30 days firm pays in 50 days the extra days taken =…
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If a firm buys on term of 3/15, net 45, what is the APR of it's non-free trade credit? What is the effective annual rate?
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- If a firm buys on terms of 3/15, net 45, but actually pays on the 20th day and still takes the discount, what is the nominal cost of its nonfree trade credit? Does it receive more or less credit than it would if it paid within 15 days?If a firm buys under terms of 1/15, net 40, but actually pays on the 20th day and still takes the discount, what is the nominal cost of its nonfree trade credit? Assume a 365-day year. Do not round intermediate calculations. Round your answer to two decimal places.A firm buys on terms of 3/15, net 45. It does not take the discount, and it generally pays after 60 days. What is the nominal annual percentage cost of its non-free trade credit, based on a 365-day year? 36.73% 25.09% 33.39% 27.59% 30.35%
- The approximate effective cost (EC) of financing the discount price of trade credit under terms 2/10, net/30 using a 360 day year is?A firm is offered trade credit terms of 3/15, net 30 days. The firm does not take the discount, and it pays after 50 days. (Assume a 365-day year.) A. The number of compounding period is ___. B. How much is the rate per period? C. How many days are there per period? D. What is the annual nominal rate of not taking this discount?A firm buys on terms of 2/10, net 30, but generally does not pay until 40 days after the invoice date. Its purchases totaled $1,095,000 per year. How much “non-free” trade credit does the firm use on average each year? What is the nominal cost of “non-free” trade credit? What is the effective cost rate of the costly credit?
- A firm is offered trade credit terms of 3/15, net 30 days. The firm does not take the discount, and it pays after 50 days. (Assume a 365-day year) a. What is the effective annual cost of not taking this discount? b. How many days are there per period? c. How much is the rate per period? d. The number of compounding period is_? e. What is the annual nominal rate of not taking this discount?f a firm buys under terms of 3/15, net 50, but actually pays on the 20th day and still takes the discount, what is the nominal cost of its nonfree trade credit? Assume a 365-day year. Do not round intermediate calculations. Round your answer to two decimal places. % Does it receive more or less credit than it would if it paid within 15 days? I. Paying after the discount period, but still taking the discount gives the firm less credit than it would receive if it paid within 15 days. II. Paying before the discount period and taking the discount gives the firm more credit than it would receive if it paid within 15 days. III. Paying after the discount period, but still taking the discount gives the firm more credit than it would receive if it paid within 15 days.If interest rates in the U.S. andeuro are 4% and 6% respectively and the spot rate for Euro ($/€) is $1.1550, what is the 90-day equilibrium forward rate for €?Calculate the percentage forward premium/discount.
- A firm is offered trade credit terms of 3/15, net 30 days. The firm does not take the discount, and it pays after 50 days. (Assume a 365-day year.) Questions: - What is the annual nominal rate of not taking this discount? - How much is the rate per period?If the 60-day interest rates (simple, p.a.) are 3% at home (usd) and 4% abroad (eur) and the spot rate moves from 1.000 to 1.001: What is the return differential, and what is the corresponding prediction of the change in the forward rate?Assume the 3-month rate on AAA-rated banker’s acceptance is currently trading at 4% p.a. (per annum). A exporter holding a letter of credit (LC) from a AAA-rated bank with a face value of $1,000,000 wishes to sell it in the market. What price can she expect to receive?
