A Firm Buys on Terms of 2/8,net 45 Days,it Does

question 37

Multiple Choice

A firm buys on terms of 2/8,net 45 days,it does not take discounts,and it actually pays after 63 days.What is the effective annual percentage cost of its non-free trade credit? (Use a 365-day year. )

• A) 14.35%
• B) 12.48%
• C) 14.06%
• D) 17.79%
• E) 11.19%

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Definitions:

Schema

Cognitive structures or frameworks that help organize and interpret information, forming the basis of knowledge and understanding.

Preoperational

A stage in Piaget's theory of cognitive development, during which a child from about 2 to 7 years old begins to engage in symbolic play but does not yet understand concrete logic.

Formal Operational

The final stage of cognitive development (as per Jean Piaget's theory), characterized by the ability to think abstractly, logically, and systematically.

Concrete Operational

A stage in Piaget's theory of cognitive development where children (around ages 7 to 12) gain the ability to think logically about concrete and specific objects and events.