Reference no: EM131179681
A firm offers terms of 1/10, net 25. (Enter your answers as directed, but do not round intermediate calculations.)
Requirement 1: What effective annual interest rate does the firm earn when a customer does not take the discount? (Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)
Effective annual interest rate %=
Requirement 2: What effective annual interest rate does the firm earn if the discount is changed to 2 percent? (Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)
Effective annual interest rate % =
Requirement 3: What effective annual interest rate does the firm earn if the credit period is increased to 45 days? (Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)
Effective annual interest rate %=
Requirement 4: What effective annual interest rate does the firm earn if the discount period is increased to 15 days? (Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)
Effective annual interest rate %=
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