A large retailer obtains merchandise under the credit terms of 3/10, net 40, but routinely takes 55 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer's effective cost of trade credit? Assume 365 days in year for your calculations. Do not round intermediate calculations. Round your answer to two decimal places.

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To calculate the retailers effective cost of trade credit we need to consider the discount period th... View the full answer