Answered: A company has offered you credit terms…

A company has offered you credit terms of 3/20 net 60. The annual percentage cost to you of foregoing the discount is a. 54% b. 27% c. 18% d. 36% e. None of the above *Please show work!

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 7P: Calculate the nominal annual cost of nonfree trade credit under each of the following terms. Assume...

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Question

A company has offered you credit terms of 3/20 net 60. The annual percentage cost to you of foregoing
the discount is
а. 54%
b. 27%
с. 18%
d. 36%
e. None of the above
*Please show work!

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