You Point Out That the Nominal Cost of Not Taking

question 109

Multiple Choice

You point out that the nominal cost of not taking the discount and paying on Day 30 is approximately 37%. But since your firm is not taking discounts and is paying on Day 20, what is the effective annual cost (not the nominal cost) of your firm's current practice, using a 365-day year?

• A) 60.3%
• B) 63.5%
• C) 66.7%
• D) 70.0%

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Definitions:

Source Amnesia

A memory disorder in which someone can remember certain information but is unable to recall where, when, or how they acquired it.

Explains

Provides a detailed account or reason for a concept, situation, or problem.

Déjà Vu

The eerie and often unsettling feeling of having already experienced a present situation, despite it being new.

Memory Construction

The process by which the brain encodes, stores, and retrieves information to create and recreate memories.