(Trade credit discounts) Determine the effective annualized cost of forgoing the trade credit discount on the following terms: a. 2/6, net 30 b. 2/7, net 45 c. 1/8, net 25 d. 5/9, net 80 e. 5/7, net 70 f. 3/7, net 60

International Financial Management
14th Edition
ISBN:9780357130698
Author:Madura
Publisher:Madura
Chapter18: Long-term Debt Financing
Section: Chapter Questions
Problem 3BIC
Question
(Trade credit discounts) Determine the effective annualized cost of forgoing the trade credit discount on the following terms:
a. 2/6, net 30
b. 2/7, net 45
c. 1/8, net 25
d. 5/9, net 80
e. 5/7, net 70
f. 3/7, net 60
Transcribed Image Text:(Trade credit discounts) Determine the effective annualized cost of forgoing the trade credit discount on the following terms: a. 2/6, net 30 b. 2/7, net 45 c. 1/8, net 25 d. 5/9, net 80 e. 5/7, net 70 f. 3/7, net 60
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