A Firm Is Offered Credit Terms of 2/10 Net 45

question 81

Multiple Choice

A firm is offered credit terms of 2/10 net 45 by most of its suppliers but frequently does not have the cash available to take the discount. The firm has a credit line available at a local bank at an interest rate of 12 percent. The firm should

• A) take the cash discount and pay on the first day of the cash discount period.
• B) take the cash discount, financing the purchase with the line of credit, the cheaper source of funds.
• C) give up the cash discount, financing the purchase with the line of credit.
• D) take the cash discount and pay on the 45th day after the date of sale.

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Definitions:

Bodily Sensations

The physical feelings or perceptions resulting from something that happens to or comes into contact with the body.

Skilled Ways

A term not typically recognized in professional or academic discourse as having a standard definition. NO.

Convergent Thinking

A problem-solving technique involving the ability to give the "correct" answer to standard questions that do not require significant creativity.

Divergent Thinking

A thought process or method used to generate creative ideas by exploring many possible solutions.