San Mateo Servers (U S ) has sold Internet servers to Telecom Espaa for EUR700,000 Payment is due in three months and will be made with a trade acceptance from Telecom Espaa Acceptance The acceptance fee is 1 0 per annum of the face amount of the note This acceptance will be sold at a 4 per annum d...

Assumptions Face amount of sale Maturity days Trad ...

San Mateo Servers (U.S.) has sold Internet servers to Telecom Espaa for EUR700,000. Payment is due in

Question:

San Mateo Servers (U.S.) has sold Internet servers to Telecom España for EUR700,000. Payment is due in three months and will be made with a trade acceptance from Telecom España Acceptance. The acceptance fee is 1.0% per annum of the face amount of the note. This acceptance will be sold at a 4% per annum discount. What is the annualized percentage all-in cost in euros of this method of trade financing?

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