Newsome Inc

question 73

Multiple Choice

Newsome Inc.buys on terms of 3/15, net 45.It does not take the discount, and it generally pays after 60 days.What is the nominal annual percentage cost of its non-free trade credit, based on a 365-day year?

• A) 25.09%
• B) 27.59%
• C) 30.35%
• D) 33.39%
• E) 36.73%

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Definitions:

Receiving Report

A document used to confirm the receipt of goods delivered, detailing the quantity and condition of the items.

Receiving Department

The section of a company responsible for the acceptance, inspection, and management of incoming goods or materials.

Work in Process

Partially finished goods undergoing manufacture, situated between raw materials and finished products in accounting and inventory.

Direct Materials

Basic substances that can be directly linked to and are essential for the creation of the final product during the manufacturing sequence.