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Help solving - Book Depot Inc. sells on terms of 1/20, net 80. What is the implicit cost of trade credit under these terms? Use

Help solving - Book Depot Inc. sells on terms of 1/20, net 80. What is the implicit cost of trade credit under these terms? Use a 365-day year. The answer is 6.14% but I do not know how to get to that in excel.

Formula for Implicit Costs of Trade Credit (APR) is

a/b, net c

a365

APR= X

100 a(c b)

1365

APR= X = 6.14%

100 1(80 20)

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