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What is the nominal annual cost of not taking the discount

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Reference no: EM132899849

Problem 1: A firm is offered trade credit terms of 3/15, net 45 days. The firm does not take the discount, and it pays after 67 days. What is the nominal annual cost of not taking the discount?

Option 1: 22.07%
Option 2: 21.71%
Option 3: 22.95%
Option 4: 24.52%

Problem 2: A firm is offered trade credit terms of 3/15, net 30 days. The firm does not take the discount, and it pays after 50 days. What is the effective annual cost of not taking this discount? (Assume a 365-day year.)

Option 1: 45.50%
Option 2: 37.39%
Option 3: 44.30%
Option 4: 32.25%
Option 5: 30.00%

Reference no: EM132899849

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