A Firm Is Offered Trade Credit Terms of 3/15,net 45

question 30

Multiple Choice

A firm is offered trade credit terms of 3/15,net 45.The firm does not take the discount,and it pays after 67 days.What is the approximate annual cost of not taking the discount?

• A) 21.41%
• B) 22.07%
• C) 22.95%
• D) 23.48%
• E) 24.52%

---

Definitions:

Taxes

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

Limited Liability Company

An organizational form blending a corporation's limited liability feature with the pass-through tax benefits of a partnership or sole proprietorship.

Manager Liability

The responsibility and potential legal accountability of managers for actions taken within the scope of their managerial roles.

Limited Liability Company

A corporate structure that integrates the limited liability characteristic of a corporation with the tax-pass-through trait of sole proprietorships or partnerships.