The calculated cost of trade credit for a firm that buys on terms of 2/10 net 30 is lower (other things held constant) if the firm plans to pay in 40 days than in 30 days.

Name: The calculated cost of trade credit for a firm that buys on terms of 2/10 net 30 is lower (other things held constant) if the firm plans to pay in 40 days than in 30 days.
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Question

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The cost of trade credit is lower if the firm pays in 40 days because the firm gets to keep the discount for 10 days longer.

The Calculated Cost of Trade Credit for a Firm That