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National Co.'s business is booming, and it needs to raise more capital. The company purchases supplies from a single supplier on terms of 1/10, net 20 days, and it currently takes the discount. One way of getting the needed funds would be to forgo the discount, and National's owner believes she could delay payment to 30 days without adverse effects. What is the effective annual rate of stretching the accounts payable? *

National Co.'s business is booming, and it needs to raise more capital. The company purchases supplies from a single supplier on terms of 1/10, net 20 days, and it currently takes the discount. One way of getting the needed funds would be to forgo the discount, and National's owner believes she could delay payment to 30 days without adverse effects. What is the effective annual rate of stretching the accounts payable? *

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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National Co.'s business is booming, and it needs to raise more capital. The company purchases supplies from a single supplier on terms of 1/10, net 20 days, and it currently takes the discount. One way of getting the needed funds would be to forgo the discount, and National's owner believes she could delay payment to 30 days without adverse effects. What is the effective annual rate of stretching the accounts payable? * Format: 11.11%
Transcribed Image Text:National Co.'s business is booming, and it needs to raise more capital. The company purchases supplies from a single supplier on terms of 1/10, net 20 days, and it currently takes the discount. One way of getting the needed funds would be to forgo the discount, and National's owner believes she could delay payment to 30 days without adverse effects. What is the effective annual rate of stretching the accounts payable? * Format: 11.11%
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