Question
A firm offers terms of 1/25, net 50. (Enter your answers as directed, but do not round intermediate calculations.) Requirement 1: What effective annual interest
| A firm offers terms of 1/25, net 50. (Enter your answers as directed, but do not round intermediate calculations.) |
| Requirement 1: |
| What effective annual interest rate does the firm earn when a customer does not take the discount?(Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) |
| Effective annual interest rate | % |
| Requirement 2: |
| What effective annual interest rate does the firm earn if the discount is changed to 2 percent? (Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) |
| Effective annual interest rate | % |
| Requirement 3: |
| What effective annual interest rate does the firm earn if the credit period is increased to 70 days? (Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) |
| Effective annual interest rate | % |
| Requirement 4: |
| What effective annual interest rate does the firm earn if the discount period is increased to 30 days?(Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) |
| Effective annual interest rate | % |
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Handbook Of Financial Econometrics
Authors: Yacine Ait-Sahalia, Lars Peter Hansen
1st Edition
044450897X, 978-0444508973
