irms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit, which affect the cost of asset of sale for the buyer as well as the seller. Consider this case: Tasty Tuna Corporation buys on terms of 4/10, net 45 from its chief supplier.   A. If Tasty Tuna receives an invoice for $856.75, what would be the true price of this invoice? (Note: Round all intermediate calculations to four decimal places, and your final answer to two decimal places.) $822.48   $575.74   $699.11   $616.86     B. The nominal annual cost of the trade credit extended by the supplier is     , assuming a 365-day year. (Note: Round all intermediate calculations to four decimal places, and your final answer to two decimal places.)   C. Suppose Tasty Tuna does not take advantage of the discount and then chooses to pay its supplier late—so that on average, Tasty Tuna will pay its supplier on the 50th day after the sale. As a result, Tasty Tuna can decrease its nominal cost of trade credit by     by paying late. (Note: Round all intermediate calculations to four decimal places, and your final answer to two decimal places.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Firms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit, which affect the cost of asset of sale for the buyer as well as the seller.
Consider this case:
Tasty Tuna Corporation buys on terms of 4/10, net 45 from its chief supplier.
 
A. If Tasty Tuna receives an invoice for $856.75, what would be the true price of this invoice? (Note: Round all intermediate calculations to four decimal places, and your final answer to two decimal places.)
$822.48
 
$575.74
 
$699.11
 
$616.86
 
 
B. The nominal annual cost of the trade credit extended by the supplier is     , assuming a 365-day year. (Note: Round all intermediate calculations to four decimal places, and your final answer to two decimal places.)
 
C. Suppose Tasty Tuna does not take advantage of the discount and then chooses to pay its supplier late—so that on average, Tasty Tuna will pay its supplier on the 50th day after the sale. As a result, Tasty Tuna can decrease its nominal cost of trade credit by     by paying late. (Note: Round all intermediate calculations to four decimal places, and your final answer to two decimal places.)
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