Fairweather Corporation Purchases Merchandise on Terms of 2/15, Net 40

question 107

Multiple Choice

Fairweather Corporation purchases merchandise on terms of 2/15, net 40, and its gross purchases (i.e., purchases before taking off the discount) are $800,000 per year.What is the maximum dollar amount of costly trade credit the firm could get, assuming it abides by the supplier's credit terms? (Assume a 365-day year.)

• A) $53,699
• B) $56,384
• C) $59,203
• D) $62,163
• E) $65,271

---

Definitions:

Adults

Individuals who have reached the age at which they are considered to be legally responsible for their actions, typically 18 or older, and are fully developed.

Scientifically Based

Refers to methods or practices that are founded on evidence gathered through scientific research and empirical data.

Cognitive-Behavioral Therapy

A form of psychotherapy that addresses dysfunctional emotions, behaviors, and cognitions through a goal-oriented, systematic process.

Twelve-Step Approach

A set of guiding principles for recovery from addiction, compulsion, or other behavioral problems, emphasizing peer support and a spiritual foundation.