If Rubash Corporation bought on terms of 1/10, net 30, what would be its nominal annual cost of costly trade credit? Assume a 365-day year.
If Rubash were unable to stretch its trade credit and hence had to pay by Day 30 if it did not take discounts, what would be its effective annual cost of costly trade credit? Assume a 365-day year.
If Rubash were able to delay payment until Day 50 rather than pay on Day 30, what would be the new nominal annual cost of its costly trade credit? Assume a 365-day year.