A Firm Offered 3/10,net 30 as Terms of Trade Credit

question 36

Multiple Choice

A firm offered 3/10,net 30 as terms of trade credit on a $1,000 invoice dated January 1.How much must the purchaser offer to pay in full on January 4^th?

• A) $970.00
• B) $971.16
• C) $1,000.00
• D) $1,030.00

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Definitions:

Operating Cash Flow

Cash generated from a company's normal business operations, indicating whether a company can generate sufficient positive cash flow to maintain and grow its operations.

EBIT

Stands for Earnings Before Interest and Taxes, a financial metric that calculates a company's profitability from its core operations, excluding the effects of financing and tax environments.

Taxes

Compulsory financial charges or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Packing Machines

Equipment used in various industries for the purpose of packaging products into containers, bags, or other formats for distribution.