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What is the effective annual interest rate the company foregoes by paying on the due date (net terms) instead of taking the cash discount if
What is the effective annual interest rate the company foregoes by paying on the due
date (net terms) instead of taking the cash discount if the company is offered 1/15 net 60 payment terms (assume 360 days in a year and annual compounding)?
a. 8.1%
b. 10.0%
c. 12.2%
d. 15.0%
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