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Compute the effective cost of not taking the cash discount under the following trade credit terms: A. 2/10 net 40 B. 2/10 net 50 C.

Compute the effective cost of not taking the cash discount under the following trade credit terms:

A. 2/10 net 40

B. 2/10 net 50

C. 3/10 net 50

D. 2/20 net 40

What conclusions can you make about these credit terms?

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