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    Annual cost of cash discount

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    A firm buys on terms of 3/15, net 45 days. It does not take the discount, and it generally pays after 65 days. What is the nominal annual cost of its non-free trade credit, based on a 365-day year?

    A. 22.58%
    B. 23.71%
    C. 24.89%
    D. 26.14%
    E. 27.44%

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    Solution Summary

    The solution explains how to calculate the nominal annual cost of cash discount