Suppose Peter's Hardware sells merchandise on account, terms 2/10, n/45, for $750 (cost of the inventory is $460) on May 17, 2013. Peter’s Hardware later received $225 of goods (cost, $140) as sales returns on May 21, 2013. The customer paid the balance due on May 26, 2013.
1. Calculate net sales revenue for may 2012.
2. Calculate gross profit for May 2013.
3. Calculate the effective interest rate for the saving, if Peter's Hardware makes the payment within the discount period.