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Calculate the nominal annual cost of nonfree trade credit under each of the following terms. Assume...

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Finance

Calculate the nominal annual cost of nonfree trade credit undereach of the following terms. Assume that payment is made either onthe due date or on the discount date. Assume 365 days in year foryour calculations. Do not round intermediate calculations.

a. 1/15, net 25. Round your answer to two decimal places.

b. 2/10, net 50. Round your answer to two decimal places.

c. 3/10, net 55. Round your answer to two decimal places.

d. 2/10, net 55. Round your answer to two decimal places.

e. 2/15, net 45. Round your answer to two decimal places.

Answer & Explanation Solved by verified expert
4.3 Ratings (864 Votes)
Case A Discount Rate 1 Discount Period 15 days Credit Period 25 days Nominal Annual Cost Discount Rate 1 Discount Rate 365 Credit Period Discount Period Nominal Annual Cost 001 1 001 365 25 15 Nominal Annual Cost 001 099 365 10 Nominal Annual Cost 0010101 365000 Nominal Annual Cost 03687 or 3687    See Answer
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