Before Spilling Coffee on an Invoice and Obliterating the Final

question 89

Multiple Choice

Before spilling coffee on an invoice and obliterating the final due date, you calculate the implied interest cost of trade credit at 24.89% and remember there is a 3% cash discount if paid within 10 days.When is the due date?

• A)30 days
• B)45 days
• C)60 days
• D)90 days

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Definitions:

Freight Costs

Expenses associated with transporting goods from one place to another, which may include shipping, handling, and insurance fees.

Seller

An individual or entity that offers goods or services for sale to consumers or other businesses.

Operating Expenses

Costs incurred in the day-to-day operations of a business, such as rent, utilities, and salaries, excluding the cost of goods sold.

Gross Profit

The difference between sales revenue and the cost of goods sold, indicating the margin earned before accounting for operating expenses.