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Compute what is the retailer effective cost of trade credit

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Reference no: EM132504442

Cost of Trade Credit

Question 1: A large retailer obtains merchandise under the credit terms of 1/10, net 30, but routinely takes 60 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer's effective cost of trade credit? Assume a 365-day year. Do not round intermediate calculations. Round your answer to two decimal places.

 

Reference no: EM132504442

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