Problem $16-04($Cost of Trade Credit$)$

Cost of Trade Credit

A large retailer obtains merchandise under the credit terms of $\frac{2}{15},$ net $45,$ but routinely takes $70$ days to pay its bills. $($Because the retailer is an important

customer, suppliers allow the firm to stretch its credit terms.$)$ What is the retailer's effective cost of trade credit? Assume a $365-$day year. Do not round intermediate

calculations. Round your answer to two decimal places.

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