The effective annual percentage cost of its non-free trade credit is 23.45%.
What is trade credit?
Trade credit is a loan given by one merchant to another when products and services are purchased on credit. Trade credit allows for the acquisition of supplies without the need for immediate payment. Business groups frequently use trade credit as a form of short-term finance. It is given to consumers that have a solid financial status and a good reputation.
Effective annual cost of its non free trade credit = (1 + Discount/(100% -discount) ^365/( days of credit - discount period ) -1
=(1+(2%/(100%-2%))^(365/(50-15))-1
=23.45%
So, E is the right answer.
To learn more about trade credit
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