Delta industries purchases on terms of 210 net 30 but, Ask an Expert

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problem: Delta Industries purchases on terms of 2/10, net 30, but generally does not pay until 40 days after the invoice date. The company purchases $1,080,000 net in materials per year. [Use a 360 day year] How much "costly" trade credit does the firm use on average each year?

[A] $ 60,000

[B] $ 90,000

[C] $ 20,000

[D] $ 30,000

[E] $100,000

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