A firm offers terms of 1y10 net 30 What effective
A firm offers terms of 1y10, net 30. 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 45 days.
c. The discount period is increased to 15 days.

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