Tangshan Mining Was Extended Credit Terms of 34/105 Net 30

question 12

Multiple Choice

Tangshan Mining was extended credit terms of 34/105 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 closest towould be ________.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)76%70.99%; 14.25%
• B)50.7%70.99%; 15.25%
• C)75%73.26%; 20.09%
• D)73%73.26%; 25.09%
• E)none of the above

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