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ASAP please 4. Suppose that a ?rm elected to tighten its trade credit policy from “2/10, net...

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Finance

ASAP please

4. Suppose that a ?rm elected to tighten its trade credit policyfrom “2/10, net 90” to “2/10, net 30.” What effect could the ?rmexpect this change to have on its liquidity?

6. Why is the rate on commercial paper usually less than theprime rate charged by bankers and more than the Treasury billrate?

8. Who is able to issue commercial paper and for whatpurpose?

Answer & Explanation Solved by verified expert
4.3 Ratings (662 Votes)
4 As the discount rate of 2 for payment within 10 days remains the same the number of customers taking the discount would depend on how successful the firm is in enforcing the 30 days limit for non discount customers If the firm is able to enforce the 30 day limit for non discount customers then the number of customers taking discount may    See Answer
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Transcribed Image Text

ASAP please4. Suppose that a ?rm elected to tighten its trade credit policyfrom “2/10, net 90” to “2/10, net 30.” What effect could the ?rmexpect this change to have on its liquidity?6. Why is the rate on commercial paper usually less than theprime rate charged by bankers and more than the Treasury billrate?8. Who is able to issue commercial paper and for whatpurpose?

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