What Is the Effective Cost of Credit Terms of 2/10

question 27

Multiple Choice

What is the effective cost of credit terms of 2/10, net 30 if the firm stretches the accounts payable to 45 days?

• A) 49.76%
• B) 36.12%
• C) 23.45%
• D) 44.59%

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Definitions:

Previous Tenant

An individual or entity that occupied a property or space prior to the current occupant.

Rent Payments

The amount of money paid periodically by a tenant to a landlord in exchange for the use of land or property.

Breaching The Lease Agreement

Breaching the lease agreement refers to failing to comply with the terms laid out in a lease contract, which can lead to legal consequences and penalties.

Promissory Breach

Occurs when a party indicates by their actions, or explicitly states, that they will not fulfill their obligations under a contract.