Problemdurham cement inc buys on terms of 215 net 30 days, Ask an Expert

Accounting

Problem:

Durham Cement, Inc. buys on terms of 2/15, net 30 days. It does not take discounts, and it typically pays 60 days after the invoice date. Net purchases amount to $720,000 per year.

Required:

Question: What is the nominal annual cost of its non-free trade credit?

Note: Please provide through step by step calculations.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91170987

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