Suppose the Credit Terms Offered to Your Firm by Your

question 21

Multiple Choice

Suppose the credit terms offered to your firm by your suppliers are 2/10,net 30 days.Out of convenience,your firm is not taking discounts,but is paying after 25 days,instead of waiting until Day 30.You point out that the nominal cost of not taking the discount and paying on Day 30 is approximately 37%.But since your firm is not taking discounts and is paying on Day 25,what is the effective annual cost (NOT the nominal cost) of your firm's current practice,using a 365-day year?

• A)60.3%
• B)63.5%
• C)66.7%
• D)70.0%

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Definitions:

Problem Needs

Identifiable requirements or gaps that a target audience or market has, which can drive the creation of new products or services.

Unstructured Questions

Open-ended questions that allow respondents to answer in their own words.

Data Warehousing

The electronic storage of a large amount of information by a business, organization, or government, centralized for easy access and analysis.

Purchase Histories

Records of an individual's or organization's past purchases, used for analyzing buying behavior or trends.