TexasLight Fruit Company Has Credit Terms of 2/15 Net 45

question 38

Multiple Choice

TexasLight Fruit Company has credit terms of 2/15 net 45. Customers should take the discount and pay in 15 days if they CANNOT earn more than ________ (EAR) on their investments.

• A) 17.81%
• B) 27.86%
• C) 24.83%
• D) 16.55%

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Definitions:

Adverse Possession

A way of acquiring title to real property by occupying it in an open and hostile manner for a statutory period.

Quitclaim Deed

A legal instrument used to transfer interest in real property from one person or entity to another, without any warranty of title.

Warranty of Title

A guarantee in a sales contract that the seller has the legal right to transfer ownership and that there are no undisclosed liens or encumbrances on the property being sold.

Right of Redemption

A legal right that allows a borrower to reclaim their property after it has been sold at foreclosure by paying off the full debt amount, plus additional costs, within a specified timeframe.