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RSB [31]
3 years ago
10

The D.J. Masson Corporation needs to raise $400,000 for 1 year to supply working capital to a new store. Masson buys from its su

ppliers on terms of 3/10, net 75, and it currently pays on the 10th day and takes discounts. However, it could forgo the discounts, pay on the 75th day, and thereby obtain the needed $400,000 in the form of costly trade credit. What is the effective annual interest rate of this trade credit
Business
1 answer:
Stels [109]3 years ago
8 0

Answer:

67.44%

Explanation:

The computation of Annualized rate is shown below:-

Annualized rate = (Discount percentage ÷ 100 - Discount percentage) × 365 ÷ (credit period - discount period)

(3% ÷ (100% - 75) × (365 ÷ (75 - 10))

= (3% ÷ 25) × (365 ÷ (75 - 10))

= 12% × 5.62

= 67.44%

Therefore for computing the annualized rate we simply applied the above formula.

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Fulbright Corp. uses the periodic inventory system. During its first year of operations, Fulbright made the following purchases
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Giving the following information:

Fulbright Corp. uses the periodic inventory system.

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The strong form of efficient market theory states that: I stock prices instantaneously reflect all publicly available informatio
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<em>According to the</em><em> strong version of efficient market theory,</em>

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<h3>What exactly is the efficient market theory?</h3>
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The efficient market hypothesis adheres to liberal economic theory and has significant political ramifications. According to the efficient market hypothesis, stock prices are always traded at a "fair" market value, negating the necessity for any form of government involvement in the market.

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Inferior good:

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