Firms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit, which will affect the actual cost of asset being sold for the buyer and the seller. Consider this case: Cold Duck Manufacturing Inc. buys most of its raw materials from a single supplier. This supplier sells to Cold Duck on terms of 2.5/15, net 45. The cost per period of the trade credit extended to Cold Duck, rounded to two decimal places, is. Cold Duck's trade credit has a nominal annual cost of assuming a 365-day year. The effective annual rate (EAR) of the supplier's trade credit is If Cold Duck Manufacturing Inc.'s supplier shortens its discount period to five days, this will the cost of the trade credit.

If the ceo of a large, diversified, firm were filling out a fitness report on a division manager (i.e., "grading" the manager), which of the following situations would be likely to cause the manager to receive a better grade? in all cases, assume that other things are held constant.a. the division's basic earning power ratio is above the average of other firms in its industry.b. the division's total assets turnover ratio is below the average for other firms in its industry.c. the division's debt ratio is above the average for other firms in the industry.d. the division's inventory turnover is 6, whereas the average for its competitors is 8.e. the division's dso (days' sales outstanding) is 40, whereas the average for its competitors is 30.