A local supermarket is offered a trade credit agreement with its main supplier in which the store can buy fresh produce on a "2/10, net 45" credit term on all purchases. The store would like to know the annual financing cost (AFC) of forgoing the cash discount. What do you think the AFC is for this trade credit term?

Answer rating: 100% (QA)

The 210 net 45 credit term means that the supermarket can receive a 2 discount if it pa... View the full answer