Question

A firm buys on terms of 2/10, net 50. It does not take the discount, and it generally pays after 60 days. What is the nominal annual percentage cost of its non-free trade credit, based on a 365-day year? a. 14.90% b. 22.58% c. 30.35% d. 33.39% e. 36.73%

Name: a firm buys on terms of 210 net 50 it does not take the discount and it generally pays after 60 days what is the nominal annual percentage cost of its non free trade credit based on a 365 da 69187
Uploaded: 2024-04-04T02:54:23-08:00
Duration: 1 min
Channel: Nick Johnson
Description: a firm buys on terms of 210 net 50 it does not take the discount and it generally pays after 60 days what is the nominal annual percentage cost of its non free trade credit based on a 365 da 69187

          A firm buys on terms of 2/10, net 50.  It does not take the discount, and it generally pays after 60 days.  What is the nominal annual percentage cost of its non-free trade credit, based on a 365-day year?
a. 14.90%
b. 22.58%
c. 30.35%
d. 33.39%
e. 36.73%

Added by Karen P.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

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Solved by Expert Nick Johnson

04/04/2024

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A firm buys on terms of 2/10, net 50. It does not take the discount, and it generally pays after 60 days. What is the nominal annual percentage cost of its non-free trade credit, based on a 365-day year? a. 14.90% b. 22.58% c. 30.35% d. 33.39% e. 36.73%