Swale Circuit Boards, Located in Montana, Has Credit Terms of 1/15

question 71

Essay

Swale Circuit Boards, located in Montana, has credit terms of 1/15 net 45. What is the implied APR and EAR of the firm's credit policy? What if the firm extends the discount to 30 days and the full payment to 60 days?

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Definitions:

Enterprising Nonprofits

Nonprofit organizations that adopt business methods and practices to generate revenue for their social, environmental, or cultural missions.

Venture Philanthropy

An approach to charitable giving that applies the principles of venture capital financing to philanthropic projects, focusing on accountability, performance measurement, and long-term engagement.

Earned-Income Activities

Activities performed by non-profit organizations or businesses that generate revenue through the sale of goods and services rather than through donations.

Social Entrepreneurs

Individuals who establish enterprises with the goal of solving social problems or effecting social change, using business principles for public good.