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

question 141

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, is 75.26 percent. 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) 18.81%.
• B) 18.25%.
• C) 21.90%.
• D) 25.09%.

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Definitions:

Corporate Corruption

Unethical practices by individuals in power within corporations, often involving bribery, embezzlement, or manipulation of financial statements.

Financial Scandal

An event where fraudulent, illegal, or unethical financial practices are exposed, often leading to public outrage and legal consequences.

Federal Trade Commission

The Federal Trade Commission is a U.S. federal agency tasked with protecting consumers and ensuring a strong competitive market by preventing unfair, deceptive, or anticompetitive business practices.

Anti-Trust Enforcement

Government actions aimed at preventing or breaking up monopolies and other forms of market dominance that restrict competition.