Trade credit is implicitly costless only:
A)during the entire net period.
B)during the prompt payment discount period.
C)between the first and last days of the net period.
D)at no time.

Question

Quizplus · Accepted Answer

Trade credit is implicitly costless only during the prompt payment discount period, as this is the only time period where the supplier is offering a discount for prompt payment. Once the discount period has passed, the supplier may charge interest on the outstanding balance, making the trade credit no longer costless.

Trade Credit Is Implicitly Costless Only