Logica utilises contractors to install its software to end users. To facilitate the provision of these goods, the company provides a standard trade finance facility to these contractors.

1. Explain how trade credit operates and how both Logica and the contractor would benefit from this type of facility.
2. Calculate the opportunity cost of an invoice that specifies the following conditions: 1.50/7, n/30. Include the correct formula as show all workings.

Answer rating: 100% (QA)

a UNDERSTANDING OPERATION OF TRADE CREDIT A trade credit is an advantage for a buyer In some cases certain buyers may be able to negotiate longer trad... View the full answer