Assignment:
Q1. Medwig Corporation has a DSO of 17 days. The company averages $3,500 in credit sales each day. What is the company’s average accounts receivable?
Q2. What is the nominal and effective cost of trade credit under the credit terms of 3/15, net 30?
Q3. A large retailer obtains merchandise under the credit terms of 1/15, net 45, but routinely takes 60 days to pay its bills. Given that the retailer is an important customer, suppliers allow the firm to stretch its credit terms. What is the retailer’s effective cost of trade credit?
Provide complete and step by step solution for the question and show calculations and use formulas.