CFA Practice Question
A company is offered trade credit terms of "2/10, net 45." The implicit cost of failing to take the discount and instead paying the account in 45 days is closest to ______.
A. 19.28%
B. 23.15%
C. 23.45%
Explanation: The cost of trade credit if paid on day 45 = (1 + 2 / 98)365/35 - 1 = 23.45%.
User Contributed Comments 2
| User | Comment |
|---|---|
| praj24 | 98??? |
| nike | 98 = 100 - 2. It's the price you could have taken. |