Tangshan Mining Was Extended Credit Terms of 3/15 Net 30

question 105

Multiple Choice

Tangshan Mining 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, would 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)70.9956.4%; 14.25%
• B)70.9962%; 15.25%
• C)75.2674%; 20.09%
• D)75.326%; 25.09%
• E)none of the above

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