Q1) Compute suitable annual rate of return on investment of following cash discount terms
1. Determine the annual rate of return on investment? Use 360 day year in your computations(use decimal points)
2. Compute annual rate of return on investment? Use 360 day period
3. Which of the terms 1-3 part is not probable to be significant incentive to customers to pay promptly
(a)1/15, net 30
(b)2/10, net 60
(c)1/10 net 90