C+ Notes' Business Is Booming, and It Needs to Raise

question 33

Multiple Choice

C+ Notes' business is booming, and it needs to raise more capital. The company purchases supplies from a single supplier on terms of 1/10, net 20 days, and it currently takes the discount. One way of getting the needed funds would be to forgo the discount, and C+'s owner believes she could delay payment to 40 days without adverse effects. What is the effective annual rate of stretching the accounts payable?

• A) 10.00%
• B) 11.11%
• C) 11.75%
• D) 12.29%
• E) 13.01%

---

Definitions:

Proton Gradient

A gradient of hydrogen ions (protons) across a membrane, used as a source of energy for processes like ATP synthesis.

Potential Energy

The energy held by an object because of its position relative to other objects, stresses within itself, its electric charge, or other factors.

Citric Acid Cycle

A sequence of biochemical processes that aerobic life forms use to liberate energy stored by oxidizing acetyl-CoA, obtained from carbs, fats, and proteins.

Glucose Molecule

A simple sugar that is an important energy source in living organisms and a component of many carbohydrates.