Detailed Answer
Answer (D) is correct. The annualized cost of not taking a discount is calculated using this formula: Cost of not taking discount = [2% ÷ (100% – 2%)] × [360 days ÷ (30 days – 10 days)] = (2% ÷ 98%) × (360 days ÷ 20 days)
= 2.0408% × 18 = 36.73%