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

question 4

Multiple Choice

Tangshan Mining has 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 ________.

• A) 75.26%
• B) 3.1%
• C) 72.99%
• D) 37.12%

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Definitions:

Selfish Desires

Individual wants or motivations focused on personal gain, often at the expense of others.

Economizing Behavior

The process of seeking to achieve maximum utility for minimal expenditure, or making decisions that reflect an optimal allocation of resources.

Satisfaction

The feeling of pleasure or fulfillment that comes from meeting needs, desires, or expectations.

Least Cost

A principle or method aimed at minimizing the cost of achieving a specific production or economic objective.