Jakob industries buys materials from its suppliers on terms


Jakob Industries buys materials from its suppliers on terms of 1/10, net 25. Thus, it receives 10 days of "free" trade credit, and it can obtain an additional 15 days of "costly" credit if it decides to forego discounts. What is the nominal annual cost of the costly credit? Assume a 365-day year. a. 15.3% b. 22.2% c. 24.6% d. 28.9% e. 31.3%

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Financial Management: Jakob industries buys materials from its suppliers on terms
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