your organisation has been offered credit terms of 1/10 net 35. what is the approximately effective...

your organisation has been offered credit terms of 1/10 net 35. what is the approximately effective annual rate of return earned if the discount offered is taken?

Expert Solution

Solution:

1 is the discount available for 25 days (35 -10), therefore:

Annual rate of return if discount is taken = 1/99 * 365/25

= 14.75%

ekkarill92 answered 2 years ago

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