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QUESTION
Your firm purchases goods from its supplier on terms of 2.3/14, net 40. (Hint: Use a 365-day year.
Your firm purchases goods from its supplier on terms of 2.3/14, net 40.
a. What is the effective annual cost to your firm if it chooses not to take the discount and makes its payment on day 40?. (Round to one decimal place.)
b. What is the effective annual cost to your firm if it chooses not to take the discount and makes its payment on day 50? (Round to one decimal place.)
