Bumpas Enterprises purchases $4,562,500 in goods per year from its sole supplier on terms of 4/10, net 65. If the firm chooses to pay on time but does not take the discount, what is the effective annual percentage cost of its non-free trade credit? (Assume a 365-day year.) a. 21.98% b. 27.65% c. 29.49% d. 31.12% e. 28.46%

Bumpas Enterprises purchases $4,562,500 in goods per year from its sole supplier on terms of 4/10, net 65. If the firm chooses to pay on time but does not take the discount, what is the effective annual percentage cost of its non-free trade credit? (Assume a 365-day year.) a. 21.98% b. 27.65% c. 29.49% d. 31.12% e. 28.46%

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 15P: Suppose a firm makes purchases of $3.65 million per year under terms of 2/10, net 30, and takes...

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