How much can company Y deduct from the bill

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Question - Company X sells on a 2/25, net 60, basis. Company Y buys goods with an invoice of $5,000.

a. How much can company Y deduct from the bill if it pays on day 25?

b. How many extra days of credit can company Y receive if it passes up the cash discount?

c. What is the effective annual rate of interest if Y pays on the due date rather than day 25?

Reference no: EM132876006

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