Freeman Builders, Inc. buys on terms of 2/15, net 30. It does not take discounts, and it typically pays 60 days after the invoice date. Net purchases amount to $720,000 per year. What is the nominal annual percentage cost of its non-free trade credit, based on a 365-day year?
A. 10.86%
B. 12.07%
C. 13.41%
D. 14.90%
E. 16.55%
Answer: E
Business
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