A large retailer obtains merchandise under the credit terms of 1/15, net 45, but routinely takes 60
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A large retailer obtains merchandise under the credit terms of 1/15, net 45, but routinely takes 60 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer’s effective cost of trade credit?
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ANSWER The effective cost of trade credit is the annualized interest rate that a company pays for th...View the full answer
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Prachi Vatsa
I have completed M.Tech in VLSI Design and B.tech in Electronics and communication Engineering.
I have worked as a lecturer in Dr. K.N Modi engineering college for two years.
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Financial management theory and practice
ISBN: 978-1439078099
13th edition
Authors: Eugene F. Brigham and Michael C. Ehrhardt
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