1
Question
Why is trade credit costly?
Why is trade credit costly?
Open in App
Solution
Trade credit is costly for firms that compensate at the end of a discount period by forgoing discounts, the companies incur costs for financing. In case the company fails to pay within the stipulated time, they may end up paying additional charges for late payment.
Trade credit is costly for firms that compensate at the end of a discount period by forgoing discounts, the companies incur costs for financing. In case the company fails to pay within the stipulated time, they may end up paying additional charges for late payment.
Suggest Corrections
0
Similar questions
Join BYJU'S Learning Program
Explore more
Join BYJU'S Learning Program
