A Firm Buys on Terms of 3/15,net 45 Days

question 38

Multiple Choice

A firm buys on terms of 3/15,net 45 days.It does not take the discount,and it generally pays after 65 days.What is the nominal annual cost of its non-free trade credit,based on a 365-day year?

• A)22.58%
• B)23.71%
• C)24.89%
• D)26.14%

Recognize the impact of transactions on the balance sheet, income statement, and statement of owner's equity.

Distinguish between expenses and investments and their effects on a business’s financial health.

Analyze the process of recording revenues and expenses and assess their impact on net income.

Reconcile the relationships between financial statements and their components.

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