Firm Buys on Terms of 2/8, Net 45 Days, It

question 84

Multiple Choice

firm buys on terms of 2/8, net 45 days, it does not take discounts, and it actually pays after 58 days.What is the effective annual percentage cost of its non-free trade credit? (Use a 365-day year.)

• A)14.34%
• B)15.10%
• C)15.89%
• D)16.69%
• E)17.52%

---

Definitions:

Social Stratification

The hierarchical arrangement of individuals or groups in society based on wealth, power, prestige, or other status indicators.

Kingsley Davis

A prominent American sociologist and demographer known for his theories on population and societal development.

Universal

pertains to something that is applicable everywhere or in all cases; a concept, condition, or idea that is globally accepted.

Functionally Necessary

Pertains to elements or processes essential for the operation or survival of a system.