A US Exporter Sells $150,000 of Furniture to a Latin American

A U.S. exporter sells $150,000 of furniture to a Latin American importer. The exporter requires the importer to obtain a letter of credit. When the bank accepts the draft,the exporter discounts the 120-day note at a 5.25 percent discount. What is the exporter's true effective annual financing cost?

A) 5.52 percent
B) 5.42 percent
C) 5.34 percent
D) 5.29 percent
E) 5.25 percent