If a Vendor's Invoice States Terms of Sale of 2/10

question 215

Multiple Choice

If a vendor's invoice states terms of sale of 2/10 net 60, the implied annual cost of interest from foregoing the discount would be:

• A)13.2%.
• B)14.6%.
• C)2.0%.
• D)13.7%.

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Definitions:

Good Y

A hypothetical product used in economics to model consumer choice, market interactions, or other economic scenarios alongside another good, typically referred to as Good X.

Consumer

An individual or group who purchases goods or services for personal use and not for manufacture or resale.

Good 2

Refers to a second good or item considered in a theoretical economic model, usually in the context of comparative analyses.

Fixed Ratio

A quantitative relationship between two or more variables where one variable is a fixed multiple of the others, often used to describe proportional relationships in finance and engineering.