A $2,800, 10% Note Dated March 12 for 80 Days

question 54

Multiple Choice

A $2,800, 10% note dated March 12 for 80 days was discounted on May 2 at 12%. The number of days in the discount period (using a 365-day year) is:

• A) 51 days.
• B) 80 days.
• C) 29 days.
• D) some other number.

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Definitions:

Equity-Financed

The method of funding a business through the sale of shares, thus raising capital without incurring debt.

Fixed Asset Turnover

A financial efficiency ratio that measures how well a company utilizes its fixed assets to generate sales.

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity.

Stock Market

A public market for buying, selling, and issuing shares of publicly held companies, serving as a critical mechanism for price discovery and capital allocation.