Buskirk Construction Buys on Terms of 2/15,net 60 Days

question 7

Multiple Choice

Buskirk Construction 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 $450,000 per year.On average,how much "free" trade credit does the firm receive during the year? (Assume a 365-day year,and note that purchases are net of discounts.)

• A)$18,493
• B)$19,418
• C)$20,389
• D)$21,408
• E)$22,479

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Definitions:

Central Limit Theorem

A statistical principle stating that with a large enough sample size, the distribution of the sample means will be approximately normally distributed, regardless of the population's distribution.

Sample Size

The number of observations or data points selected from a population for statistical analysis.

Central Limit Theorem

A statistical theory that states the distribution of sample means approximates a normal distribution as the sample size becomes large, regardless of the population's distribution.

Sampling Distribution

The sampling distribution is a probability distribution of a statistic obtained through a large number of samples drawn from a specific population.