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What effective annual interest rate does the firm

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Reference no: EM131898728

A firm offers terms of 2/15, net 60.

a. What effective annual interest rate does the firm earn when a customer does not take the discount? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Effective annual interest rate             %

b. What effective annual interest rate does the firm earn if the discount is changed to 3 percent? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Effective annual interest rate             %

c. What effective annual interest rate does the firm earn if the credit period is increased to 80 days? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Effective annual interest rate             %

d. What effective annual interest rate does the firm earn if the discount period is increased to 20 days? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Effective annual interest rate             %

Reference no: EM131898728

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