A firm buys on terms of 2/8, net 45 days, it does not take discounts, and it actually pays after 85 days. What is the effective annual percentage cost of its non-free trade credit? (Use a 365-day year.)

A. 10.05%
B. 10.55%
C. 7.84%
D. 8.64%
E. 9.55%


Answer: A

Business

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