Detailed Answer
Answer (D) is correct. The annualized cost of not taking a discount is calculated with this formula: Cost of not taking discount = [3% ÷ (100% – 97%)] × [360 days ÷ (30 days – 10 days)] = (3% ÷ 97%) × (360 days ÷ 20 days) = 3.0928% × 18 = 55.67%