One day, Barry the Barber, Inc., collects $500 for haircuts. Over this day, his equipment depreciates in value by $80. Of the re
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Answer: The cost of non-free trade credit is 23.45%
We follow these steps to arrive at the answer
We have:
Discount Rate 2%
First we find .
Adding 1 to the number above we get 1.020408163
Next we'll find the number of extra credit days after the discount period.
Next we need to raise 1.020408163 to the fraction of 365/35. We get
Finally we need to deduct 1 from the number above to get
We express the number above as a percentage to arrive at the cost of non-free trade credit.