Use the Information to Answer the Following Question(s)

question 38

Multiple Choice

Use the information to answer the following question(s) .
SureDrip Irrigation Systems Inc. is supplied with plastic chips for their plastic injection molding manufacturing process. Their supplier, Sun Chemical, Inc. offers financing terms of a 2% discount if the accounts payable are paid in 10 days or less with the full balance due in 45 days. Short-term financing available to SureDrip is available at an annual rate of 9.6%. SureDrip has just purchased $400,000 of plastic chips from Sun Chemical.
-Refer to Instruction 21.1. What is the effective annual interest cost of supplier financing offered by Sun Chemical?

• A)7.3%
• B)9.5%
• C)10.4%
• D)22.9%

---

Definitions:

Unpaid Community Service

Voluntary work intended to help people in a community without receiving financial compensation.

Résumé

A document summarizing an individual's background, skills, and accomplishments, used for job applications.

Recruiters

Professionals who seek out, interview, and select applicants for employment, often for specific positions within a company or organization.

Essential Information

Crucial or necessary data or facts that are vital for understanding a situation or for making decisions.