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Find what is the effective annual percentage cost

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Problem 1: Howes Inc. purchases $4,562,500 in goods per year from its sole supplier on terms of 2/15, net 50. If the firm chooses to pay on time but does not take the discount, what is the effective annual percentage cost of its non-free trade credit? (Assume a 365-day year.)

Option a. 24.63%

Option b. 22.28%

Option c. 23.45%

Option d. 20.11%

Option e. 21.17%

Reference no: EM132614287

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