2B5BB DUDLEY PRODUCTS IS GIVEN TERMS OF 2/10, NET 45 BY ITS SUPPLIERS...

177.

CSO: 2B5f

LOS: 2B5bb

Dudley Products is given terms of 2/10, net 45 by its suppliers. If Dudley forgoes the

cash discount and instead pays the suppliers 5 days after the net due date, what is the

annual interest rate cost (using a 360-day year)?

a.

18.0%.

b.

18.4%.

c.

21.0%.

d.

24.5%.