What is annualized cost of trade credit

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Reference no: EM131546934

Part A: ABC Company's Inventory Turnover Ratio (COGS basis) is 13.3 and is expected to remain constant. If the cost of goods solds is expected to change this year from 398,000 to 300,000, by how much will inventory change? (if the answer is negative, remember to input the negative sign in your answer).

Part B: ABC extends credit to its customers on terms of 1/10, net 50. Assuming a customer pays the invoice at the end of the costly trade credit period, what is the annualized cost of trade credit? (Show your answer in decimal form to four places, e.g., 12.34% would be 0.1234)

Reference no: EM131546934

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