Determine the effective annual cost

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Reference no: EM1368058

A Company is offered trade credit terms of 2/8, net 45. The company does not take the discount, and it pays after 58 days. Determine the effective annual cost of not taking this discount?

Another firm, buys on terms of 2/15, net 30. It does not take discounts, and it typically pays 35 days after the invoice date. Net purchases amount to $720,000 per year. What is the nominal cost of its non-free trade credit?

Reference no: EM1368058

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Determine the effective annual cost : A Company is offered trade credit terms of 2/8, net 45. The company does not take the discount, and it pays after 58 days. Determine the effective annual cost of not taking this discount?

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