Ask Question
BusinessBusiness
16 May, 05:40

A firm is offered trade credit terms of 2/8, net 45 days. The firm does not take the discount. It pays after 58 days. What is the effective annual cost (EFF%) of not taking this discount

+3
Answers (1)
  1. 16 May, 08:47
    0
    Answer: 15.89%

    Explanation:

    Since no discounts were taken, this company made your job a whole lot easier because if we are for instance assuming a 365 day year then you simply take the base period of payments which is 58 days in this scenario and divide by 365.

    So it would come out like,

    = 58/365

    = 15.89%

    If you need any clarification just drop a comment. Cheers.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “A firm is offered trade credit terms of 2/8, net 45 days. The firm does not take the discount. It pays after 58 days. What is the effective ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
which of the following best describes message flows? Multiple Choicea) message flows are continuous with each poolb) message flows are modeled with solid arrowsc) message flows represent exhcanges between poolssd) message flows may not cross pool
Answers (1)
Economists were sharply divided over how to best fight the Great Recession. A vocal minority of economists favored the "Structural Solution," arguing that the economy needs to undergo some structural adjustments and that government should,
Answers (1)
The following totals for the month of July were taken from the payroll register of Lakeside Company. Salaries$16,000Social security and medicare taxes withheld900Employees federal income taxes withheld2,500Medical insurance deductions450Federal
Answers (1)
George, a chef and owner of L'Auberge, a popular restaurant, is always visiting his competitors to observe how they are doing things in their restaurants.
Answers (1)
Here are data on two stocks, both of which have discount rates of 8%: Stock A Stock B Return on equity 8 % 5 % Earnings per share $ 2.60 $ 1.80 Dividends per share $ 1.30 $ 1.
Answers (1)
New Questions in Business
The first phase of a comprehensive project risk assessment should be: To develop reasonable estimates of the impacts on the project of both the identified risks and the proposed solutions.
Answers (1)
A gift that might otherwise be viewed as a future interest in a trust can be treated as a present interest gift if:
Answers (1)
Curtain Co. paid dividends of $10,000; $12,500; and $14,000 during Year 1, Year 2, and Year 3, respectively. The company had 2,100 shares of 5.5%, $100 par value preferred stock outstanding that paid a cumulative dividend.
Answers (1)
Describe how legal contracts provide incentives for people to exchange goods and services
Answers (1)
List four wan technologies that are carried over the pstn.
Answers (1)
Home » Business » A firm is offered trade credit terms of 2/8, net 45 days. The firm does not take the discount. It pays after 58 days. What is the effective annual cost (EFF%) of not taking this discount
Sign Up Forgot Password?