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1. The credit terms offered to your firm by a supplier are 2.8/6 net 30. Calculate the cost of trade credit if your firm does

1. The credit terms offered to your firm by a supplier are 2.8/6 net 30. Calculate the cost of trade credit if your firm does not take the discount and pays on day 30.

2. Your supplier offers a term of 1.9/12 net 45. What is the effective annual cost of trade credit if you choose to forgo the discount and pay on day 45?

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