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A Firm Is Offered Trade Credit Terms of 2/8,net 45

Question 100

Multiple Choice

A firm is offered trade credit terms of 2/8,net 45 days.The firm does not take the discount,and it pays after 58 days.What is the effective annual cost of not taking this discount? (Assume a 365-day year.)


A) 13.35%
B) 14.70%
C) 15.89%
D) 18.70%

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