A Firm Has Just Received an Invoice for $1,000 with the Following

question 103

Multiple Choice

A firm has just received an invoice for $1,000 with the following terms: 3/10,net 30.In this case,the firm

• A)should not worry about earning the cash discount because the amount is small.
• B)can take a 10 percent discount if it pays within 3 days,and otherwise the full amount is due in 30 days.
• C)can take a 3 percent discount if it pays the invoice on the 30th day.
• D)will in effect be borrowing at an annual rate of 54 percent if it pays the invoice in 30 days.
• E)should pay $900 if it pays within 10 days.

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Definitions:

Imperialism

A policy or practice by which a country extends its power and dominion over other nations or territories through colonization, military conquest, or economic domination.

Usury

is the practice of charging excessively high interest rates on loans, which has historically been considered morally reprehensible by many societies.

Maritime Power

Maritime power refers to a nation's strength and capability in navigating, controlling, and utilizing the seas for military, trade, or exploration purposes.

Signoria

A form of government in Italian city-states during the medieval and Renaissance periods, characterized by rule by a single lord or a hereditary ruling family.