A firm offers terms of 1/10, net 30. What effective annual interest rate does the firm earn when a consumer does not take the discount? Without doing any calculations, explain what will happen to this effective rate if:
A. The discount is change to 2 percent.
B. The credit period is increased to 40 days.
C. The discount period is decreased to 20 days.
D. What is the EAR for each scenario?