Answer:
On average, the firm receives $20,547.65 free trade credit during the year
Explanation:
According to the given data we have the following:
buy terms=2/15, free trade credit is 15 days., net=30 days
CASH PRICE amount= $500,000
Therefore, in order to calculate how much "FREE" trade credit does the firm receive during the year we would have to use the following formula:
Trade credit= (15/365)× $500,000= $20,547.95
On average, the firm receives $20,547.65 free trade credit during the year
