What Is the Effective Cost of Credit Terms of 2/10

question 27

Multiple Choice

What is the effective cost of credit terms of 2/10, net 30 if the firm stretches the accounts payable to 45 days?

• A) 49.76%
• B) 36.12%
• C) 23.45%
• D) 44.59%

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Definitions:

Phishing

Online fraud in which criminals pretend to be legitimate companies by using e-mails or malicious websites that trick individuals and companies into providing useful information, such as bank account numbers, Social Security numbers, and credit-card numbers.

Identity Theft

The act of stealing another’s identifying information—such as a name, date of birth, or Social Security number—and using that information to access the victim’s financial resources.

Cyber Fraud

Fraud that involves the online theft of credit-card information, banking details, and other information for criminal use.

Unauthorized

Acting or being present without official permission or approval.