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The official terms of purchases of National Co. are 2/10, net 30 but generally the company does not pay until 40 days after the invoice date.  Its purchases total P3,600,000 per year.  Assuming 360 days a year, the approximate cost of the “non-free trade credit amounts to

The official terms of purchases of National Co. are 2/10, net 30 but generally the company does not pay until 40 days after the invoice date.  Its purchases total P3,600,000 per year.  Assuming 360 days a year, the approximate cost of the “non-free trade credit amounts to

Intermediate Financial Management (MindTap Course List)
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter21: Supply Chains And Working Capital Management
Section: Chapter Questions
Problem 6P
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The official terms of purchases of National Co. are 2/10, net 30 but generally the company does not pay until 40 days after the invoice date.  Its purchases total P3,600,000 per year.  Assuming 360 days a year, the approximate cost of the “non-free trade credit amounts to

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