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A Firm Buys on Terms of 2/8,net 45 Days,it Does

question 50

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A firm buys on terms of 2/8,net 45 days,it does not take discounts,and it actually pays after 58 days.What is the effective annual percentage cost of its non-free trade credit? (Use a 365-day year.)


Definitions:

Produced

Refers to goods or services that have been manufactured, created, or brought forth through a combination of resources and labor.

Purely Competitive Market

A market structure characterized by a large number of buyers and sellers, homogeneous products, and no single buyer or seller having any control over the market price.

Product Price

The sum of money needed to buy a specific product or service.

Wage Rate

The amount of compensation paid to employees for their labor per unit of time, often expressed per hour or year.

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