Your Firm Purchases Goods from Its Supplier with a Discount

question 69

Multiple Choice

Your firm purchases goods from its supplier with a discount of 1%,and a credit period of 20 days.If the effective annual cost of forgoing the discount is 27.71%,what is the length of the discount period?

• A)25 days
• B)20 days
• C)15 days
• D)10 days
• E)5 days

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Definitions:

Soft-Drink Vending Machine

A machine that dispenses cold beverages, such as sodas and juices, usually upon insertion of a coin or token.

Schedule

A plan that gives expected times for different things to happen.

Fixed Interval

In the context of reinforcement, it refers to a schedule where rewards are delivered at consistent time intervals after a desired behavior is performed.

Hour

A unit of time equivalent to 60 minutes or 1/24th of a day.