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a. Argo sells maintenance services to various private jet operators. For these, it demands payment within 15 days. Argo is considering changing this policy to

a. Argo sells maintenance services to various private jet operators. For these, it demands payment within 15 days. Argo is considering changing this policy to 1.1%/5, net 15. What is the implicit effective annual rate in this payment policy?

Important: Show formulas used to calculate

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A B 1 a) Effective Annual Rate (EAR) 2 3 Notional purchase 4 Discount (%) 5 Days difference 6 7 Discount ($) 8 Rate (%) 9 Days difference in 1 year 10 11 EAR

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