## Trade credit terms 2 10 net 40

What is the nominal and effective cost of trade credit under the credit terms of 3/10, net 40? Assume 365 days in a year for your calculations. Round your answers to two decimal places. Do not round intermediate calculations. II. 2/10 Net 30 And Other Discounts. Related to Net 30 above is the trade credit where customers can receive a percentage discount if they submit payment within a shorter time frame. If not, the normal terms apply. So, for example, in 2/10 Net 30 (also written as 2/10, n/30)—if the customer pays within 10 days, he/she will receive a 2% discount.

## trade credit and the cost of changing suppliers offering different trade credit terms are modeled using a net For example, a selling firm with terms of 2/10, net 30, is offering its customer the opportunity to For example, at kp = 40%, the NPV.

### 2/10, net 55. Round your answer to two decimal places. % 2/15, net 40. Round your answer to two decimal places. % 2b. Accounts Payable. A chain of appliance stores, APP Corporation, purchases inventory with a net price of \$600,000 each day. The company purchases the inventory under the credit terms of 2/15, net 30.

extend the trade credit terms, is a compromise between limiting the risk of 2. Value Based Management of Accounts. Receivable. If holding accounts 2/10, net 30 to 3/10, net 40) considered by firm will result: 40% of firm customers will pay.