Assume a firm receives the following credit terms from six suppliers and a 365-day year. Supplier 1:
Question:
Assume a firm receives the following credit terms from six suppliers and a 365-day year.
Supplier 1: 2/10 net 50
Supplier 2: 1/10 net 30
Supplier 3: 2/10 net 150
Supplier 4: 3/10 net 60
Supplier 5: 1/10 net 45
Supplier 6: 1/20 net 80
Determine the interest rate associated with not taking the cash discount and paying at the end of the credit period for each of the six suppliers’ credit terms.
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Related Book For
Introduction to Corporate Finance What Companies Do
ISBN: 978-1111222284
3rd edition
Authors: John Graham, Scott Smart
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