Taylor Textbooks Inc. buys on terms of 2/15, net 50 days. It does not take discounts, and it typically pays on time, 50 days after the invoice date. Net purchases amount to $450,000 per year. On average, what is the dollar amount of costly trade credit (total credit ? free credit) the firm receives during the year? (Assume a 365-day year, and note that purchases are net of discounts.)
A. $43,151
B. $45,308
C. $47,574
D. $49,952
E. $52,450
Answer: A
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