Question: Company X sells on a 1/30, net 60 basis. Customer Y buys goods invoiced at $1,000.
- How much can Y deduct from the bill if Y pays on day 30?
- What is the effective annual rate of interest if Y pays on the due date rather than on day 30?
- How would you expect payment terms to change if
1. The goods are perishable.
2. The goods are not rapidly resold.
3. The goods are sold to high-risk firms.