If a Company Is Given Credit Terms of 2/10 N/30

question 231

Multiple Choice

If a company is given credit terms of 2/10 n/30 it should

• A) hold off paying the bill until the end of the credit period while investing the money at 10% annual interest during this time.
• B) pay within the discount period and recognize a savings.
• C) pay within the credit period but don't take the trouble to invest the cash while waiting to pay the bill.
• D) recognize that the supplier is desperate for cash and withhold payment until the end of the credit period while negotiating a lower sales price.

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Definitions:

Compromise

Conflict management style that attempts to find the middle ground in a conflict.

Coercive Power

is a form of authority or influence that is based on the ability to impose sanctions or punishments, often used in a context where obedience is compelled by fear of negative consequences.

Legitimate Power

A form of authority derived from a position of responsibility within an organizational hierarchy.

Expert Power

The influence one holds over others as a result of specialized knowledge, skills, or expertise.