Peaches Creamery Ltd

Multiple Choice

Peaches Creamery Ltd. would like to reduce the average number of days it takes to collect its receivables from 60 days down to 30 days. Peaches thinks this can be accomplished by offering a 1% discount to customers who pay withing 30 days. Precisely what is a customer's annualized cost of forgoing the discount?

A) 6.1%
B) 6.2%
C) 11.1%
D) 12.2%
E) 13.0%