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Trade credit may be used to finance a major part of the firms

Customer Question

Trade credit may be used to finance a major part of the firm's working capital when
   a. the firm extends less liberal credit terms than the supplier.
   b. the firm extends more liberal credit terms than the supplier.
   c. the firm and the supplier both extend the same credit terms.
   d. neither the firm nor the supplier extends credit.
The cost of not taking the discount on trade credit of 2/20, net 60 is equal to
   a. 18.36%
   b.16.32%
   c. 18.00%
d. 17.41%
Holland Construction Co. has an outstanding 180-day bank loan of $400,000 at an annual interest rate of 9.5%. The company is required to maintain a 15% compensating balance in its checking account. What is the effective interest rate on the loan? Assume the company would not normally maintain this average amount.
   a. 11.18%
   b.19.00%
   c. 22.35%
   d. 8.08%
Submitted: 5 years ago.
Category: Finance
Expert:  SteveS replied 5 years ago.
Customer

 

Here are the solutions to the problems you posted. If you are satisfied with the answer, please remember to click on the Accept button. Thanks!

 

Steve

Customer: replied 5 years ago.
you have taken to long!
Expert:  SteveS replied 5 years ago.
Customer

The original post says that there's still over 23 hours left before it was due. I don't understand what you mean by "you have taken too long."

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