Your Firm Purchases Goods from Its Supplier on Terms of 2/20

question 6

Multiple Choice

Your firm purchases goods from its supplier on terms of 2/20 net 60.The effective annual cost to your firm if it chooses not to take advantage of the trade discount offered is closest to:

• A)33.17%
• B)27.65%
• C)13.08%
• D)44.58%
• E)20.24%