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%

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Definitions:

Parallel-Joint Driveline

In driveline terminology, a drive shaft construction in which all of the companion flanges and yokes are parallel with the working angles of the U-joints set to being equal and opposite.

Mating Yokes

Components designed to connect or join together in a mechanical system, ensuring proper alignment and transfer of motion or force.

Transmission Output Shaft

The shaft that transmits power from the transmission to the drive wheels.

Driveshaft Vibration

Unwanted oscillations of the driveshaft, often due to imbalance or misalignment, that can lead to driveability issues or damage.