Which of the Following Terms Would a Firm Use to Speed

question 66

Multiple Choice

Which of the following terms would a firm use to speed up cash flow?

• A) 1/10; net 60
• B) 1/10; net 30
• C) 3/10; net 30
• D) 2/10; net 60
• E) 2/10; net 30

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Definitions:

Insurance

A financial product that provides protection against losses or damages, typically in the form of a policy for which the insured pays a premium.

Residual Value

The calculated estimate of what an asset will be worth when it reaches the end of its functional life.

Straight-Line Depreciation

Straight-line depreciation is a method of allocating the cost of a tangible asset over its useful life in equal annual amounts.

Book Value

The value of an asset as it appears on the balance sheet, determined by cost minus accumulated depreciation.