Instruction 22.1: Use the Information to Answer Following Question(s)

question 49

Multiple Choice

Instruction 22.1:
Use the information to answer following question(s) .
SureDrip Irrigation Systems Inc. is supplied with plastic chips for their plastic injection molding manufacturing process. Their supplier, Sun Chemical, Inc. offers financing terms of a 2% discount if the accounts payable are paid in 10 days or less with the full balance due in 45 days. Short-term financing available to SureDrip is available at an annual rate of 9.6%. SureDrip has just purchased $400,000 of plastic chips from Sun Chemical.
-Refer to Instruction 22.1. What is the effective annual interest cost of supplier financing offered by Sun Chemical?

• A) 7.3%
• B) 9.5%
• C) 10.4%
• D) 22.9%

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Definitions:

Face-to-Face

Direct communication between individuals in the same physical location, often considered the most effective form of communication.

Political Device

tactics or strategies used within a group or organization to gain power or favor.

Reward

The benefit, recognition, or compensation received as a result of completing a task or achieving a goal.

Complementary Skills

Abilities that enhance or complete each other when combined, improving team performance or project outcomes.