Choice "C" is correct. 31.81% annual cost of not taking the discount.
Annual cost of not taking discount | = | 360(Total pay period − Discount period) | × | Discount %(100% − Discount %) |
| = | [360 ÷ (45 − 10)] × [3% ÷ (100% − 3%)] |
| = | 31.81% |
Choices "b", "d", and "a" are incorrect, per the above calculation.
