Required:

a$.$ A firm currently offers terms of sale of $\frac{3}{20},$ net $40.$ Calculate the effective annual rate.

a$-1.$ Calculate the effectlve annual rate If the terms are changed to $\frac{4}{20},$ net $40.$

a$\mathrm{.}2.$ What effect does an Increase in the discount rate have on the Implicit Interest rate charged to customers that pass

up the discount?

b$-1.$ Calculate the effective annual rate If the terms are changed to $\frac{3}{30},$ net $40.$

b$-2.$ What effect does a decrease in the extra days of credit have on the Implicit Interest rate charged to customers that

pass up the discount?

c$-1.$ Calculate the effective annual rate if the terms are changed to $\frac{3}{20},$ net $30.$

$c-2$ Is there any difference between the Implicit interest rate for terms of $\frac{3}{30},$ net $40$ and $\frac{3}{20},$ net $30?$

Answer is not complete.

Complete this question by entering your answers in the tabs below.

Req A Req A$1$ and A$2$ Req B$1$ and B$2$ Req C$1$ and C$2$

A firm currently offers terms of sale of $\frac{3}{20},$ net $40.$ Calculate the effective annual rate. $($Use $365$ days in a year. Do not rounc

intermediate calculations. Enter your answer as a percent rounded to $2$ decimal places.$)$