Freeman Builders, Inc

question 82

Multiple Choice

Freeman Builders, Inc.buys on terms of 2/15, net 30.It does not take discounts, and it typically pays 60 days after the invoice date.Net purchases amount to $720, 000 per year.What is the nominal annual percentage cost of its non-free trade credit, based on a 365-day year?

• A) 10.86%
• B) 12.07%
• C) 13.41%
• D) 14.90%
• E) 16.55%

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Definitions:

Elicited

Refers to a response that is drawn out or evoked by a specific stimulus or condition.

Intermittent Reinforcement

A conditioning schedule in which a reward or punishment (reinforcement) is not given every time the desired response is performed, making the response more resistant to extinction.

Continuous Reinforcement

A schedule of reinforcement in which a desirable behavior is rewarded every time it occurs, leading to rapid learning.

Extinction Contrast Effect

The increased difference in the intensity or frequency of a response observed when a previously reinforced behavior is no longer reinforced, in the presence of a contrasting condition that continues to be reinforced.