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Question
A firm is offered trade credit terms of 2/8, net 45. The firm does not take the discount, and it pays after 58 days. What is the effective annual cost of not taking this discount? (Note: Do not use the approximate cost.)
a. 21.63%
b. 13.35%
c. 22.95%
d. 15.65%
e. 18.70%
Answer
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