Determine the effective annualized cost of forgoing the trade discount on terms 1/20 net 45.
A) 14.55%
B) 15.24%
C) 16.780%
D) 20.69%

Name: Determine the effective annualized cost of forgoing the trade discount on terms 1/20 net 45. A) 14.55% B) 15.24% C) 16.780% D) 20.69%
Brand: Quizplus
Rating: 4.9 (37 reviews)

Question

Quizplus · Accepted Answer

The effective annualized cost of forgoing the trade discount on terms 1/20 net 45 is 14.55%. This is because the discount is 1% and the net period is 45 days. So, the effective annualized cost is 1% / (45/365) = 14.55%.

Determine the Effective Annualized Cost of Forgoing the Trade Discount