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

question 44

Multiple Choice

Tangshan Mining was 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 ________. If the firm were able to stretch its accounts payable to 60 days without damaging its credit rating, the cost of giving up the cash discount would only be ________.

• A) 72.99%; 18.81%
• B) 72.99%; 18.25%
• C) 75.25%; 21.90%
• D) 75.26%; 25.09%

---

Definitions:

Cynical Personality

A personality trait characterized by a pervasive distrust and suspicion of others' motives and intentions.

Factitious Disorder

A psychological disorder characterized by the deliberate fabrication of symptoms or self-infliction of injury in order to assume the sick role without external incentives.

Munchausen Syndrome

Munchausen Syndrome is a psychiatric disorder wherein individuals purposely feign disease, illness, or psychological trauma to draw attention, sympathy, or reassurance to themselves.

Somatic Symptom Disorder

A mental disorder characterized by an excessive focus on physical symptoms, such as pain or fatigue, that causes major emotional distress and difficulties in functioning.