What are the nominal and effective costs of trade credit to


Grunewald Industries sells on terms of 2/10, net 30. Gross sales last year were $4,965,500, and accounts receivable averaged $416,500. Half of Grunewald's customers paid on the 10th day and took discounts. What are the nominal and effective costs of trade credit to Grunewald's nondiscount customers? (Hint: Calculate sales/day based on a 365-day year; then get average receivables of discount customers; then find the DSO for the nondiscount customers.) Do not round intermediate calculations. Round your answers to two decimal places. What is "Nominal cost" as a percentage? What is "Effective cost" as a percentage?

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Financial Management: What are the nominal and effective costs of trade credit to
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