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What effective annual interest rate does the firm earn

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A firm offers terms of 1/10, net 35. What effective annual interest rate does the firm earn when a customer does not take the discount? Without doing any calculations, explain what will happen to this effective rate if:

a. The discount is changed to 2 percent.

b. The credit period is increased to 60 days.

c. The discount period is increased to 15 days.

Reference no: EM13940478

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