Hardy Construction, has credit terms of 1/15 net 45. What is the implied APR and EAR of the firm's credit policy? What if the firm extends the discount to 30 days and the full payment to 60 days?
What will be an ideal response?
Answer:
APR = × = × = 12.29%.
EAR = - 1 = - 1 = 13.01%.
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