Calculate the nominal annual cost of nonfree trade

Assignment Help Accounting Basics

Reference no: EM131525398

Question: Calculate the nominal annual cost of nonfree trade credit under each of the following terms. Assume payment is made either on the due date or on the discount date.

a. 1/15, net 20.

b. 2/10, net 60.

c. 3/10, net 45.

d. 2/10, net 45.

e. 2/15, net 40.

2. a. If a firm buys under 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?

b. Does it receive more or less credit than it would if it paid within 15 days?

Reference no: EM131525398

Questions Cloud

What is the average accounts payable for app : A chain of appliance stores, APP Corporation, purchases inventory with a net price of $500,000 each day. The company purchases the inventory under the credit.

Everything flows from a proper job analysis in hr : Everything flows from a proper job analysis in HR. What other functions of HR might be affected by a poor job analysis? Can anyone think of a good example?

What is the days sales outstanding : McDowell Industries sells on terms of 3/10, net 30. Total sales for the year are $912,500. Forty percent of the customers pay on the 10th day.

Real issue necessitating the conversation : Identify the "real" issue necessitating the conversation. Describe your goal in speaking with an employee.

Calculate the nominal annual cost of nonfree trade : Calculate the nominal annual cost of nonfree trade credit under each of the following terms. Assume payment is made either on the due date or on the discount.

Budgeting time and valuing risk management : You have been assigned to analyze the project plan of a payroll system that is behind schedule and over budget.

Personnel planning-recruiting and talent management : Even with the recession, employers are having trouble finding and hiring employees. The main purpose of this chapter is to explain the tools employers.

Who is the target market for the ad : MKTG 201 Marketing Management Assignment.Who is the target market for the ad? (Note that the newspaper or magazine itself is related to the target market.)

What are the nominal and effective costs of trade : Grunewald Industries sells on terms of 2/10, net 40. Gross sales last year were $4,562,500, and accounts receivable averaged $437,500.

User Account

All Pages