Use the Information to Answer the Following Question(s)

question 18

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 amount of money SureDrip will save on accounts payable if they accept the discount?

• A)$400,000
• B)$8,000
• C)$33,333
• D)$20,000

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Definitions:

Bank Accounts

Financial accounts maintained by individuals or businesses in a banking institution for the purpose of managing money.

Takings Clause

A clause in the Fifth Amendment of the U.S. Constitution requiring that when government uses its power to take private property for public use, it must pay the owner just compensation, or fair market value, for the property.

Condemnation

The legal process by which government or a legal entity takes private property for public use, with compensation to the owner.

Fifth Amendment

An amendment to the U.S. Constitution that provides several protections to individuals, including protection against self-incrimination and double jeopardy, and ensures due process of law.