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A firm buys on terms of 2/10, net 30, but generally does not pay until 40 days after the invoice date

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A firm buys on terms of 2/10, net 30, but generally does not pay until 40 days after the invoice date. Its purchases total P1,080,000 per year. What is the approximate cost of the “non-free” trade credit?

A. 21.9%

B. 24.5%

C. 16.2%

D. 19.4%