Sparta Pty (Ltd) purchases an average of R100 000 of inventory from its supplier on an...

  

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Sparta Pty (Ltd) purchases an average of R100 000 of inventory from its supplier on an annual basis. The credit terms of the supplier is 2.5/15 net 45 and is strictly enforced. The cost of other short-term financing options (such as the bank overdraft) has an effective annual rate of 17%. What will the nominal annual cost of credit be for Sparta if they follow the policy of paying for the purchases on the latest date allowed? a. 31,20% - Rather make use of other financing option at an effective annual rate of 17% b. 31,20% - Make use of the policy of paying for purchases at the latest date allowed rather than making use of other financing options. c. 25,35% - Make use of the policy of paying for purchases at the latest date allowed rather than making use of other financing options. d. 30,10% Rather make use of other financing option at an effective annual rate of 17% Sparta Pty (Ltd) purchases an average of R100 000 of inventory from its supplier on an annual basis. The credit terms of the supplier is 2.5/15 net 45 and is strictly enforced. The cost of other short-term financing options (such as the bank overdraft) has an effective annual rate of 17%. What will the nominal annual cost of credit be for Sparta if they follow the policy of paying for the purchases on the latest date allowed? a. 31,20% - Rather make use of other financing option at an effective annual rate of 17% b. 31,20% - Make use of the policy of paying for purchases at the latest date allowed rather than making use of other financing options. c. 25,35% - Make use of the policy of paying for purchases at the latest date allowed rather than making use of other financing options. d. 30,10% Rather make use of other financing option at an effective annual rate of 17%

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