Which of the Following Is the Effect of Purchasing Merchandise

question 139

Multiple Choice

Which of the following is the effect of purchasing merchandise on account with credit terms 2/10, n/30?​

• A) ​There is no effect on the liquidity and profitability metrics.
• B) ​There is an increase in liquidity, while profitability remains unchanged.
• C) ​There is an increase in profitability, while liquidity remains unchanged.
• D) ​There is an increase in the liquidity and profitability metrics.

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Definitions:

Characteristics

Features or qualities that identify and distinguish an object, individual, or concept from others.

Bonds

Debt securities issued by corporations, governments, or other entities to investors, promising to repay the principal along with interest at a specified date.

Annual Market Rate

The interest rate applicable for a period of one year, often used in the context of loans, savings, or investments.

Present Value Tables

Tables that help in determining the present value of a future amount of money or stream of cash flows given a specific interest rate.