Orange Turtle Group buys on terms of 3.5/15, net 45 from itschief supplier.
If Orange Turtle receives an invoice for $1,545.78, what wouldbe the true price of this invoice?
a. $1,491.68
b. $1,267.93
c. $1,118.76
d. $1,044.18
The nominal annual cost of the trade credit extended by thesupplier is _____.
a. 43.29%
b. 36.66%
c. 39.75%
d. 44.17%
The effective annual rate of interest on trade credit is_______.
a. 63.72%
b. 44.82%
c. 54.00%
d. 55.08%
Suppose Orange Turtle does not take advantage of the discountand then chooses to pay its supplier late. On average, OrangeTurtle will pay its supplier on the 50th day after the sale. As aresult, Orange Turtle can decrease its nominal cost of trade creditby _____ by paying late.
a. 11.99
b. 7.26
c. 11.36
d. 6.31
