Andrews corporation buys on terms of 18 net 45 days it does


Andrews Corporation buys on terms of 1/8, net 45 days, it does not take discounts, and it actually pays after 58 days. What is the effective cost of its trade credit? (Use a 365-day year.)

a. 7.61%

b. 9.96%

c. 7.37%

d. 17.52%

e. 10.42%

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Financial Management: Andrews corporation buys on terms of 18 net 45 days it does
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