calculated cost of trade credit can be reduced by paying late.

Question

Quizplus · Accepted Answer

Trade credit cost is calculated as the difference between the cash price and the credit price. By paying late, the company can hold on to its cash for longer and reduce the impact of trade credit costs on its bottom line. However, consistently paying late can also harm the company's reputation and relationship with its suppliers, leading to potential supply chain disruptions.

Calculated Cost of Trade Credit Can Be Reduced by Paying