A Firm Offers Credit Terms of 3/15, Net 20 to Its

question 42

Multiple Choice

A firm offers credit terms of 3/15, net 20 to its customers, which means the firm allows its customers to:

• A) take a 15 percent discount on the invoice price if payment is made on or before Day 20 of the billing cycle; after that, only a 3 percent discount will be available.
• B) take a 20 percent discount on the invoice price if payment is made on or before Day 15 of the billing cycle; after that, only a 3 percent discount will be available.
• C) take a 3 percent discount on the invoice price if payment is made on or before Day 15 of the billing cycle; otherwise, the entire bill is due by Day 20.
• D) take a 15 percent discount on the invoice price if payment is made on or before Day 3 of the billing cycle; otherwise, the entire bill is due by Day 20.
• E) take a 20 percent discount on the invoice price if payment is made on or before Day 3 of the billing cycle; otherwise, the entire bill is due by Day 15.

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Definitions:

Divergence Theory

A conceptual framework suggesting that differences in economic development, cultural practices, or societal norms will increase over time between groups or regions.

Breach of Contract

Refers to a legal violation where one party fails to honor their end of the agreement, allowing the other party to seek legal remedies.

Political Unionism

The participation and involvement of labor unions in political activities and lobbying in order to influence public policy for the benefit of workers.

Political Mobilization

The process of gathering support and resources by organizations or political entities to achieve specific goals or influence policy.