Determine effective annual cost


Question: Delta Industries purchases on terms of 2/10, net 30, but generally does not pay until 40 days after the invoice date. The company purchases $1,080,000 net in materials per year. [Use a 360 day year] Determine the effective annual cost of not taking the discount?

[A]      25.4%

[B]      24.7%

[C]      27.4%

[D]      26.5%

[E]      23.5%

Request for Solution File

Ask an Expert for Answer!!
Finance Basics: Determine effective annual cost
Reference No:- TGS021407

Expected delivery within 24 Hours