Compute effective annual cost to firm

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Problem 1: Your firm purchases goods from a supplier on credit; such payables are due within 30 days maximum. However, if you pay within 10 days, you receive a discount of 2% on the total invoice. The effective annual cost to your firm if it chooses not to take advantage of the trade discount offered and stretches the accounts payable to the maximum available days is closest to:

A. 45.9%.

B. 43.9%.

C. 44.6%.

D. 42.1%.

Reference no: EM132757421

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