When a Customer of the Majestic Sign Company Chooses to Pay

question 118

Multiple Choice

When a customer of the Majestic Sign Company chooses to pay immediately on delivery rather than wait to be billed in 30 days, the buyer receives a 5 percent discount. What is this discount an example of?

• A)a quantity discount
• B)a cash discount
• C)a functional discount
• D)a promotional discount

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Definitions:

Cost of Capital

The return rate that a company must earn on its projects to maintain its market value and attract funds.

Variable Cost

Costs that change in proportion to the level of production or sales, such as materials and labor.

Capacity

The maximum amount of work that an organization, system, or machine can produce in a given period.

Multiproduct Break-Even

An analysis used to determine the point at which total revenue equals total costs for multiple products, indicating no profit or loss.