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Smith's Irrigation Supply, Inc., purchases PVC pipe from the manutacturer under credit terms of 3 1 5 , n 3 0 . Assuming it buys

Smith's Irrigation Supply, Inc., purchases PVC pipe from the manutacturer under credit terms of 315,n30. Assuming it buys $500 day, 360 days per year, answer the following:
a. If Smith's pays on the tenth day, how much is its total discount for the year?
b. Assume instead that Smith's forgoes the early payment discount for the extra financing it receives. What is the effective interest rate (cost) of the forgone early discount?
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