The effective annual rate of interest

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Reference no: EM1336387

1. Company X sells on a 1/30, net 60 basis. Customer Y buys goods invoiced at $1,000.

- How much can Y deduct from the bill if Y pays on day 30?

- What is the effective annual rate of interest if Y pays on the due date rather than on day 30?

- How would you expect payment terms to change if

1. The goods are perishable.

2. The goods are not rapidly resold.

3. The goods are sold to high-risk firms.

Reference no: EM1336387

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