Calculate the Effective Interest Rate of a 2/5, Net 25

question 88

Multiple Choice

Calculate the effective interest rate of a 2/5, net 25 terms of sale, using a 365-day year.

• A)24.5%
• B)36.5%
• C)42.5%
• D)55.5%

Identify when a tax on goods is likely to be effective in both reducing consumption and generating revenue.

Understand that the impact of a tax on consumption can depend on the availability of substitutes.

Know the distinction between price elastic and price inelastic demand.

Understand the conditions under which a tax might not reduce consumption of a good.

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Definitions:

Physical Capital

Assets used in the production process that are tangible in nature, such as machinery, buildings, and vehicles.

Proprietary Knowledge

Information that is not public and is owned by an individual or company, giving them a competitive advantage.

Public Goods

Goods that are neither excludable nor rival in consumption.

Private Goods

Goods that are both excludable and rival in consumption.