Accounts Payable Financing Trade Credit Project Trader Petes buys $6,000,000 (invoice price) of inventory from one of its vendors on terms of 3/10, net 40:
1. Trader Petes Gross Price is:
2. Trader Petes True Price is:
3. Trader Petes financing cost is:
4. Trader Petes Net Daily Payable (NDP)cost is:
5. Trader Petes Total Trade Credit is:
6. Trader Petes Free Trade Credit is:
7. Trader Petes Costly Trade Credit is:
8. Show Work using the Costly Trade Credit Formula the cost rate is:
9. Show Work Using the Approximate Cost Formula the cost rate is:
10. Trader Petes Effective Annual Rate (EAR) is:
Answer & Explanation
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