The Company You Just Started Has Been Offered Credit Terms

question 105

Multiple Choice

The company you just started has been offered credit terms of 4/30, net 90 days.What will be the nominal annual percentage cost of its non-free trade credit if it pays 120 days after the purchase? (Assume a 365-day year.)

• A) 16.05%
• B) 16.90%
• C) 17.74%
• D) 18.63%
• E) 19.56%

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Definitions:

Reactant Molecules

Substances that take part in a chemical reaction and are consumed to form products.

Transition State

A high-energy state during a chemical reaction where reactants are converted to products, representing a point of maximum energy along the reaction pathway.

Free Energy

A thermodynamic quantity that represents the amount of energy in a system that is available to do work at constant temperature and pressure.

Exergonic Reaction

A chemical reaction that releases energy to the surroundings, often contributing to spontaneous processes, such as cellular respiration.