Examlex

Solved

What Is the Effective Annual Cost of Credit Terms of 2/20

question 42

Multiple Choice

What is the effective annual cost of credit terms of 2/20, net 60, if the firm stretches the accounts payable to 80 days?


Definitions:

Appraised Value

An estimate of the fair value of an asset, determined by a professional appraiser based on inspection and analysis of the asset and market conditions.

Consolidated Common Stock

The combined total of common stock held by a parent company and its subsidiaries, presented as a single item in consolidated financial statements.

Common Stock

A type of corporate equity ownership that confers a share in the company's profits and losses, as well as voting rights in corporate decisions.

Voting Shares

Shares of a company's stock that grant the shareholder the right to vote on corporate matters such as the election of the board of directors.

Related Questions