[Use the following information for the next two questions.] You gathered the following information from the financial statements of a company you are researching. Accounts receivables: $500,000 (end of year), $430,000 (beginning of year) Account payable: $350,000 (end of year), $380,000(beginning of year) Inventory: $1million (end of year), $1.1 million (beginning of year) Sales: $5.6 million over the year Cost of goods sold: $4 million over the year

What is the effective annual rate (EAR) of trade credit terms: 2/5 net 60?

		2.04%
		14.35%
		13.54%
		15.32%