Ningbo Steel Was Extended Credit Terms of 3/15 Net 30

question 39

Multiple Choice

Ningbo Steel was extended credit terms of 3/15 net 30 EOM.The cost of giving up the cash discount, assuming payment would be made on the last day of the credit period, is 75.26 percent.If the firm were able to stretch its accounts payable to 60 days without damaging its credit rating, the cost of giving up the cash discount would only be

• A)18.81%
• B)18.25%
• C)21.90%
• D)25.09%
• E)none of the above

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Definitions:

Absorbed

The process by which one substance becomes fully incorporated into another, or how energy or matter is taken in or soaked up.

Intramuscular (IM)

A method of administering medication or vaccines directly into a muscle.

Subcutaneous

Refers to the layer of tissue directly under the skin.

Medication Absorption

The process by which drugs are transferred from the site of entry into the body to the bloodstream, influencing the drug's efficacy and timing of effect.