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A firm is offered trade credit terms of 2/10, net 35 days. The firm does not take the discount, and it pays after 57 days.
A firm is offered trade credit terms of 2/10, net 35 days. The firm does not take the discount, and it pays after 57 days.
What is the firm's discount percentage? What is the firm's actual credit period? What is the nominal annual cost of not taking the discount? (Assume a 365-day year.) What is the effective annual cost of not taking the discount? (Assume a 365-day year.)
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