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Delta Industries buys on terms of 2/10, net 40. The firm purchases $1,080,000 net in materials per year. ( Use 360 days a year .)

Delta Industries buys on terms of 2/10, net 40. The firm purchases $1,080,000 net in materials per year. (Use 360 days a year.)

  1. How much costly trade credit does the firm use on average each year?
  2. What is the effective annual cost of not taking the discount?

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