Development Buys on Terms of 2/15, Net 60 Days

question 109

Multiple Choice

Development buys on terms of 2/15, net 60 days.It does not take discounts, and it typically pays on time, 60 days after the invoice date.Net purchases amount to $550,000 per year.On average, what is the dollar amount of total trade credit (costly + free) the firm receives during the year, i.e., what are its average accounts payable? (Assume a 365-day year, and note that purchases are net of discounts.)

• A)$ 90,411
• B)$ 94,932
• C)$ 99,678
• D)$104,662
• E)$109,895

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Definitions:

Esteem

The need all humans have to be respected by others as well as by themselves.

Self-actualization

The realization or fulfilment of one's talents and potentialities, considered as a drive or need present in everyone.

Motivation

The inward drive we have to get what we need or want.

Maslow's Hierarchy

A psychological theory proposed by Abraham Maslow that categorizes human needs into a five-tier model, ranging from basic (physiological) needs to higher needs (self-actualization), illustrating motivational factors driving human behavior.