As the production manager of HPG, Inc., you have received an offer from the supplier who provides the wires used in headsets. Due to poor planning, the supplier has an excess amount of wire and is willing to sell $750,000 worth for only $600,000. You already have one year's supply of wire on hand. This new wire would be used one year from today. What implied interest rate would your firm be earning if you purchased the wire?
A) -20%
B) 13.5%
C) 21%
D) 25%

Question

Quizplus · Accepted Answer

The implied interest rate is calculated by finding the percentage difference between the discounted price and the original price, which is ($750,000 - $600,000) / $600,000 = 25%.

As the Production Manager of HPG, Inc