Calculate the Effective Cost of the Following Trade Credit Terms

question 8

Essay

Calculate the effective cost of the following trade credit terms if the discount is foregone and payment is made on the net due date.
a. 2/15 net 30
b. 2/15 net 45
c. 2/15 net 60

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Definitions:

Terminal Moraine

A terminal moraine is a type of moraine that forms at the end of a glacier, marking the furthest advance of the glacier, and consists of a ridge of debris that was transported and deposited by the ice.

Drumlins

Elongated hills formed by glacial ice acting on underlying debris, oriented in the direction of ice movement.

Loess

A fine, wind-deposited sediment that forms fertile soil, typically found in prairie regions.

Glaciers

Large masses of ice on land that move slowly over time, formed by the accumulation and compaction of snow, significantly influencing landscapes through erosion and deposition.