What Is the Effective Annual Cost of Credit Terms of 3/15

question 88

Multiple Choice

What is the effective annual cost of credit terms of 3/15 net 30, if the firm stretches the accounts payable to 60 days?

• A) 1.7%
• B) 3.35%
• C) 12.65%
• D) 28.03%

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Definitions:

Null Hypothesis

A rephrased definition: The presumption that no significant relationship exists in the population and that any observed effect is due to sampling variability.

Indirectly

In a way that is not directly expressed or done; an indirect method or approach.

Null Hypotheses

A statement used in statistics that proposes there is no significant difference or relationship between specified populations, or no effect of a particular treatment.

Sample

A subset of a population selected for observation and analysis in order to make inferences about the entire population.