What Is the Effective Cost of Credit Terms of 3/5

question 16

Multiple Choice

What is the effective cost of credit terms of 3/5 net 45 if the firm stretches the accounts payable to 60 days?

• A) 12.9%
• B) 35.6%
• C) 39.9%
• D) 22.4%

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Definitions:

Isoprene

A common organic compound with the formula C5H8, used as a monomer in the production of natural and synthetic rubbers.

Steroids

A class of lipophilic compounds characterized by a core structure of four fused carbon rings, varying by the functional groups attached and serving in various biological roles.

Sesquiterpene

A class of terpenes that consist of three isoprene units and have the molecular formula C15H24.

Steroid

A type of organic molecule with a characteristic molecular structure containing four rings of carbon atoms (three six-membered and one five-membered).