The Lasser Company needs to finance an increase in its working capital for the coming year.Lasser is reviewing the following three options: (1)The firm can borrow from its bank on a simple interest basis for one year at 13 percent.(2)It can borrow on a 3-month,but renewable,loan at a 12 percent simple rate.The loan is a simple interest loan,completely paid off at the end of each quarter,then renewed for another quarter.(3)The firm can increase its accounts payable by not taking discounts.Lasser buys on credit terms of 1/30,net 60 days.What is the effective annual cost (not the approximate cost)of the least expensive type of credit,assuming 360 days per year?
A) 13.0%
B) 12.82%
C) 11.46%
D) 12.12%
E) 12.55%

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The Answer of The Lasser Company needs to finance an increase in its working capital for the coming year.Lasser is reviewing the following three options: (1)The firm can borrow from its bank on a simple interest basis for one year at 13 percent.(2)It can borrow on a 3-month,but renewable,loan at a 12 percent simple rate.The loan is a simple interest loan,completely paid off at the end of each quarter,then renewed for another quarter.(3)The firm can increase its accounts payable by not taking discounts.Lasser buys on credit terms of 1/30,net 60 days.What is the effective annual cost (not the approximate cost)of the least expensive type of credit,assuming 360 days per year?
A) 13.0%
B) 12.82%
C) 11.46%
D) 12.12%
E) 12.55%

The Lasser Company Needs to Finance an Increase in Its