Answered

At Westonci.ca, we make it easy for you to get the answers you need from a community of knowledgeable individuals. Discover solutions to your questions from experienced professionals across multiple fields on our comprehensive Q&A platform. Join our platform to connect with experts ready to provide precise answers to your questions in different areas.

Mavericks Cosmetics buys $3,798,658 of product (net of discounts) on terms of 2/10, net 60, and it currently pays on the 10th day and takes discounts. Mavericks plans to expand, and this will require additional financing. If Mavericks decides to forego discounts, what would the effective percentage cost of its trade credit be, based on a 365-day year

Sagot :

Tundexi

if Mavericks decides to forego discounts, then, 15.89% would be the effective percentage of cost of its trade credit.

Effective cost of not taking discount = (1 + (%Discount / (1-Discount%)^ (365/(Total days - Discount days)) -1

Effective cost of not taking discount = (1 + (2% / (100%-2%))^(365/(60-10)) -1

Effective cost of not taking discount = (1.02040816327^7.3) - 1

Effective cost of not taking discount = 1.15890983226 - 1

Effective cost of not taking discount = 0.15890983226

Effective cost of not taking discount = 15.89%

Therefore, if Mavericks decides to forego discounts, then, 15.89% would be the effective percentage of cost of its trade credit.

Read more about effective percentage:

brainly.com/question/23028901

Thank you for trusting us with your questions. We're here to help you find accurate answers quickly and efficiently. Thanks for stopping by. We strive to provide the best answers for all your questions. See you again soon. Thank you for trusting Westonci.ca. Don't forget to revisit us for more accurate and insightful answers.