Problem 4: Compute the effective cost of not taking the cash discount under the following trade credit terms:
a. 2/10 net 40
b. 2/10 net 50
c. 3/10 net 50
d. 2/20 net 40
Problem 5: What conclusions can you make about credit terms from reviewing your answers to Problem 4?
Click here for the solution: Compute the effective cost of not taking the cash discount under the following trade credit terms
