Question regarding nominal annual percentage cost


Your company has been offered credit terms of 4/30, net 90 days. What will be the nominal annual percentage cost of its nonfree trade credit if it pays 120 days after the purchase? (Assume a 365-day year.)

a. 16.05%

b. 16.90%

c. 17.74%

d. 18.63%

e. 19.56%

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Accounting Basics: Question regarding nominal annual percentage cost
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