On January 1,2012,Shaffer Co

question 10

Multiple Choice

On January 1,2012,Shaffer Co.purchased inventory for $1,000 cash with credit terms of 2/10,n/30.If Shaffer does not pay within the discount period,what is the effective annual interest rate?

• A) 9.13%
• B) 12.17%
• C) 18.25%
• D) 36.5%

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Definitions:

Inputs

Resources used in the production process, such as labor, capital, and materials.

Total Output

The total quantity of goods or services produced by an individual, firm, or country over a specified period.

Production Function

A mathematical model that describes the relationship between the inputs used in production and the output of goods or services.

Inputs

Resources, such as labor, materials, and capital, that are used in the production process to create goods and services.