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Trader Pete S Buys 6 000 000 Invoice Price Of Inventory From One Of Its Vendors (1)

Trader Pete’s buys $6,000,000 (invoice price) of inventory from one of its vendors on terms of 3/10, net 40:

1.        Trader Pete’s Gross Price is: 6000000

2.        Trader Pete’s True Price is: 5820000

3.        Trader Pete’s financing cost is:

4.        Trader Pete’s Net Daily Payable (NDP)cost is:

5.        Trader Pete’s Total Trade Credit is:

6.        Trader Pete’s Free Trade Credit is:

7.        Trader Pete’s Costly Trade Credit is:

8.        Show Work – using the Costly Trade Credit Formula the cost rate is:

9.        Show Work Using the Approximate Cost Formula the cost rate is:

10.    Trader Pete’s Effective Annual Rate (EAR) is:

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