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

question 70

Multiple Choice

A firm buys on terms of 3/15,net 45.It does not take the discount,and it generally pays after 60 days.What is the nominal annual percentage cost of its non-free trade credit,based on a 365-day year?

• A)25.09%
• B)27.59%
• C)30.35%
• D)33.39%
• E)36.73%

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Definitions:

Collaboration

Mutual efforts by two or more individuals who perform activities to accomplish certain tasks.

Business Partners

Individuals or companies that engage in a continuing relationship to conduct business or collaborate on a project.

Distribution Channel

The pathway through which goods or services flow from the producer to the consumer.

Sorting Centers

Facilities where items, such as mail, packages, or other goods, are sorted according to their destination or other criteria before being sent out for delivery or further processing.