suppose you purchase goods on terms of 5/10 net 90. What is the effective annual rate...
suppose you purchase goods on terms of 5/10 net 90. What is the effective annual rate implied by the discount? You can assume a sale of $100
Please show work. Thanks
Homework Answers
Effective annual cost = (1 + Discount/(100 -discount) ^365/(
days of credit - discount period ) -1
= (1 + 0.05/0.95)^(365/(90 -10)) -1= 0.1105 or 11.05% =
26.37%
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suppose you purchase goods on terms of 5/10 net 90. What is the
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