Roton inc purchases merchandise on terms of 215 net 40 and, Ask an Expert

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Roton Inc. purchases merchandise on terms of 2/15, net 40, and its gross purchases (i.e., purchases before taking off the discount) are $800,000 per year. What is the maximum dollar amount of costly trade credit the firm could get, assuming it abides by the supplier's credit terms? (Assume a 365-day year.)

Answer

$53,699

$56,384

$59,203

$62,163

$65,271

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