What is dollar amount of costly trade credit firm

Assignment Help Financial Management

Reference no: EM131506452

Taylor Textbooks Inc. buys on terms of 2/15, net 50 days. It does not take discounts, and it typically pays on time, 50 days after the invoice date. Net purchases amount to $450,000 per year. On average, what is the dollar amount of costly trade credit (total credit − free credit) the firm receives during the year? (Assume a 365-day year, and note that purchases are net of discounts.)

Reference no: EM131506452

Questions Cloud

NPV and abandonment : The owners of Egg Sauce, Ltd. are tired of their business. In fact, they are so exhausted that they are considering abandoning the business.

Analyse the dividend policy of EasyJet plc : This question requires you to analyse the dividend policy of EasyJet plc.

Buy land because they are not making any more of it : Do you agree with the old advice " buy land because they are not making any more of it ? Why international investing is more risker than domestics ?

Policies have on the company cash conversion cycle : What effect would these policies have on the company's cash conversion cycle?

What is dollar amount of costly trade credit firm : what is the dollar amount of costly trade credit (total credit - free credit) the firm receives during the year?

What is this securitys equivalent pre-tax yield : What is this security’s equivalent pre-tax yield if the bank’s tax rate is 20 percent?

What is the practical limit based on liquidity : Planetary Travel Co. has $184,000,000 in stockholders’ equity. What is the practical limit based on liquidity?

What is the effective interest cost : Mary Smith wants to buy a property for $275,000 and obtains an 80 percent loan. If Doe repays the loan after five years, what is the effective interest cost?

What is the nature of the current market at present : What is the nature of the current market at present? (Trump Era) (Gertie)

User Account

All Pages