Question

# a-1. A firm currently offers terms of sale of 3/10, net 50. Calculate the effective annual rate. (Use 365 days

in a year. Do not round intermediate calculations. Round your answer to 2 decimal places.) Effective annual rate % a-2. Calculate the effective annual rate if the terms are changed to 4/10, net 50. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 2 decimal places.) Effective annual rate % a-3. What effect will part (a-2) have on the implicit interest rate charged to customers that pass up the cash discount? Increase Decrease b-1. Calculate the effective annual rate if the terms are changed to 3/20, net 50. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 2 decimal places.) Effective annual rate % b-2. What effect will this have on the implicit interest rate charged to customers that pass up the cash discount? Increase Decrease c-1. Calculate the effective annual rate if the terms are changed to 3/10, net 40. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 2 decimal places.) Effective annual rate % c-2. What effect will this have on the implicit interest rate charged to customers that pass up the cash discount? Increase Decrease