Annie's is a gift shop in Texas. Her suppliers offer the firm credit on terms of 2/10
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Question:
Annie's is a gift shop in Texas. Her suppliers offer the firm credit on terms of 2/10 net 30 days. She does not take discounts but rather pays on 25 days. Her new finance manger is considering instead taking discounts offered and borrowing from its bank using short term notes at an annual rate of 11%
What is Annie's nominal cost of trade credit assuming a 365 day year?
The firm net purchases are $1160 per day. Using 365 day year what is her current level of average payable.
What are her payable projected to be under the new policy?
Related Book For
Intermediate Financial Management
ISBN: 9780357516669
14th Edition
Authors: Eugene F Brigham, Phillip R Daves
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