Find the annual financing cost of forgoing the cash discount

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Reference no: EM13927142

1. Calculate the annual percentage rate of forgoing the cash discount under each of the following credit terms: a. 2/10, net 60 b. 2/10, net 30.

2. Determine the annual financing cost of forgoing the cash discount if the credit terms are "1/10, net 30" and the invoice is not paid until it is 20 days past due.

3. Determine the annual financing cost of a 1-year (365 day), $10,000 discounted bank loan at a stated annual interest rate of 9.5 percent. Assume that no compensating balance is required.

Reference no: EM13927142

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