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Required: a. A firm currently offers terms of sale of 4/20, net 50. Calculate the effective annual rate. a-1. Calculate the effective annual rate if
Required: a. A firm currently offers terms of sale of 4/20, net 50. Calculate the effective annual rate. a-1. Calculate the effective annual rate if the terms are changed to 5/20, net 50. a-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 4/30, net 50. 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 4/20, net 40. c-2. Is there any difference between the implicit interest rate for terms of 4/30, net 50 and 4/20, net 40? Complete this question by entering your answers in the tabs below. Reg A Req A1 and A2 Req B1 and B2 Reg C1 and C2 A firm currently offers terms of sale of 4/20, net 50. Calculate the effective annual rate. (Use 365 days in a year. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Effective annual rate %
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