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What is the approximate annual cost of foregoing the cash discount if the credit term is 2/15, net 40 and the company pays end of 50 days? Use 360 days a year.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 17P

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Question

What is the approximate annual cost of
foregoing the cash discount if the credit term
is 2/15, net 40 and the company pays end of
50 days? Use 360 days a year.

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