Q1) Filbeck Company purchases on terms of 2/15, net 30 days. It doesn't take discounts, and it typically pays 30 days after invoice date. Net purchases amount to $500,000 per year. On average, how much "free" trade credit does firm receive in the year? (Suppose a 365-day year.)
a) $20,548
b) $21,575
c) $22,654
d) $23,787
e) $24,976
Q2) Company has been offered credit terms of 4/30, net 90 days. Determine nominal annual cost of trade credit be if you pay 100 days after purchase? (Suppose a 365-day year.)
a) 20.64%
b) 21.73%
c) 22.81%
d) 23.95%
e) 25.15%