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A firm that stretches its payables gains an extra 1 month before it needs to pay for its purchases of raw materials but it loses

A firm that stretches its payables gains an extra 1 month before it needs to pay for its purchases of raw materials but it loses a 2% discount for prompt payment. This is like borrowing at an effective annual interest rate of:

Multiple Choice

19.40%
27.43%
24.00%
26.53%

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