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Calculate the present value savings associated with paying on the last day of the discount trade credit period, as compared to the last day of

Calculate the present value savings associated with paying on the last day of the discount trade credit period, as compared to the last day of the net trade credit period. Assume a $40,000 purchase is made from a supplier that offers trade credit terms of 2/10 net 30. Also, assume a discount rate of 5%.

a.

-$689.91
b.

$39,146.37
c.

$39,836.29
d.

$689.91

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