Explain what will happen to this effective rate

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A firm offers terms of 1/10, net 35. What effective annual interest rate does the firm earn when a customer does not take the discount? Without doing any calculations, explain what will happen to this effective rate if: a. The discount is changed to 2 percent. b. The credit period is increased to 60 days. c. The discount period is increased to 15 days.

Reference no: EM13288184

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