What is the average level of the companys free trade credit

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Reference no: EM13943018

A firm purchases $4,562,500 in goods over a 1 year period from its sole supplier. The supplier offers trade credit under the following terms: 2/15, net 50 days. Davis finally chooses to pay on time (pay in the 50th day) but not to take the discount. We assume 365 days per year. What is the average level of the company's free trade credit?

a) $187,500

b) $437,000

c) $625,000

d)$4,562,500

Reference no: EM13943018

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