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A firm offers terms of 2/15, net 40. What effective annual interest rate does the firm earn when a customer does not take the discount?
A firm offers terms of 2/15, net 40. What effective annual interest rate does the firm earn when a customer does not take the discount? Without doing any calculation, explain what will happen to this affective rate if: a. The discount is change to 3 percent. b. The credit period is increased to 60 days. c. The discount period is decrease to 20 days. d. What is the EAR for each Scenario
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Handbook Of Financial Intermediation And Banking
Authors: Anjan V. Thakor, Arnoud Boot
1st Edition
0444515585, 978-0444515582
