Anne Lockwood, manager of Oaks Mall Jewelry, wants to sell on credit, giving customers 3 months in

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Anne Lockwood, manager of Oaks Mall Jewelry, wants to sell on credit, giving customers 3 months in which to pay. However, Anne will have to borrow from her bank to carry the accounts payable. The bank will charge a nominal 15 percent, but with monthly compounding. Anne wants to quote a nominal rate to her customers (all of whom are expected to pay on time) that will exactly cover her financing costs. What nominal annual rate should she quote to her credit customers?

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Related Book For  answer-question

Financial management theory and practice

ISBN: 978-0324422696

12th Edition

Authors: Eugene F. Brigham and Michael C. Ehrhardt

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