FSA Trade Credit Mock Exam Quesiton reading, material, afternoon

RealEstate_CFA

Question 74 of afternoon session of 2009 Mock exam:
Where is this in the reading material. I haven’t seen this in the Schweser notes.

atate2007

Can anyone help with this?

defour44

Its probably in working capital management I havent seen the question so I cant be more specific. Was it about trade discounts?

yodacaia

Its in the curriculum for sure…. it means u get a 2% discount if you pay within the first 10 days.. otherwise you must pay Before Day 45.
Please check the TB and make sure this is correct… i dont have it on me right now..

kmf229

if you pay in 10 days  you get a 2% discount, otherwise in 45 days you are to pay the whole amount.
so if you did not take the discount: 2/98 per period more.
you are going to be paying (1+2/98)
annualize this with the annualizing factor being 365/35
35=4510
so answer: (1+2/98)^(365/35) =1.2345 1 = 23.45%

onelife1

Thanks cpk…