Jiffy Park Inc. can buy its inventory from the following two suppliers both of which offer essentially the same pricing and quality. Their credit terms are as follows: Supplier A 2/10, net 30
Supplier B 3/10, net 20
Jiffy Park is frequently short on cash and is often unable to take advantage of prompt payment discounts. Calculate the nominal cost of trade credit for each supplier given that Jiffy Park will usually pay its suppliers in 40 days.

Biochemical corp. requires $600,000 in financing over the next three years. the firm can borrow the funds for three years at 10.80 percent interest per year. the ceo decides to do a forecast and predicts that if she utilizes short-term financing instead, she will pay 7.50 percent interest in the first year, 12.15 percent interest in the second year, and 8.25 percent interest in the third year. assume interest is paid in full at the end of each year. a)determine the total interest cost under each plan. a) long term fixed rate: b) short term fixed rate: b) which plan is less costly? a) long term fixed rate plan b) short term variable rate plan