Question 36 A company has daily purchases of $10,000 from its supplier. The supplier offers trade credit under the following terms: 3/20, net 50 days. The company finally chooses to pay on time (pay in the 50th day) but not to take the discount. We assume 365 days per year. What is the average level of the company’s free trade credit? ______ $30,000 $170,000 $200,000 $300,000 Question 37 Based on the information from Question 36, what is the average level of the company’s total trade credit? $170,000 $200,000 $300,000 $500,000 38 . Based on the information from Question 36, what is the average level of the company’s costly trade credit? $170,000 $200,000 $300,000 $500,000 Question 39 Based on the information from Question 36, what is the nominal annual cost of the firm’s costly trade credit? 28.6% 29.3% 33.5% 37.6% Based on the information from Question 36, what is the effective annual cost of the firm’s costly trade credit? 35.8% 37.6% 39.5% 44.9%
Question 36
A company has daily purchases of $10,000 from its supplier. The supplier offers trade credit under the following terms: 3/20, net 50 days. The company finally chooses to pay on time (pay in the 50th day) but not to take the discount. We assume 365 days per year. What is the average level of the company’s free trade credit? ______
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$30,000 |
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$170,000 |
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$200,000 |
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$300,000 |
Question 37
Based on the information from Question 36, what is the average level of the company’s total trade credit?
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$170,000 |
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$200,000 |
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$300,000 |
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$500,000 |
38 . Based on the information from Question 36, what is the average level of the company’s costly trade credit?
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$170,000 |
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$200,000 |
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$300,000 |
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$500,000 |
Question 39
Based on the information from Question 36, what is the nominal annual cost of the firm’s costly trade credit?
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28.6% |
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29.3% |
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33.5% |
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37.6% |
Based on the information from Question 36, what is the effective annual cost of the firm’s costly trade credit?
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35.8% |
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37.6% |
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39.5% |
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44.9% |
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