Nottingham Financial purchases computer parts from its suppliers 2/10, net 60. However, Nottingham routinely stretches accounts payable 10 days beyond the due date. What is the effective annual cost of not taking the trade discount? How much does the account stretching reduce the cost of not taking the trade discount?
Nottingham Financial purchases computer parts from its suppliers 2/10, net 60. However, Nottingham routinely stretches accounts payable 10 days beyond the due date. What is the effective annual cost of not taking the trade discount? How much does the account stretching reduce the cost of not taking the trade discount?
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter16: Supply Chains And Working Capital Management
Section: Chapter Questions
Problem 8P: Captain Whitman Ship Supplies offers terms of 3/15, net 45.
If a purchaser takes the discount and...
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Nottingham Financial purchases computer parts from its suppliers 2/10, net 60. However, Nottingham routinely stretches accounts payable 10 days beyond the due date. What is the effective annual cost of not taking the trade discount? How much does the account stretching reduce the cost of not taking the trade discount?
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