A Firm Buys on Terms of 3/10, Net 30

question 105

Multiple Choice

A firm buys on terms of 3/10, net 30. What is the cost of trade credit under these terms?

• A) 55.7%
• B) 47.4%
• C) 31.5%
• D) 23.2%

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Definitions:

Economic Conditions

The state of various factors that influence an economy at a given time, including inflation rates, unemployment levels, and the rate of economic growth.

Ceteris Paribus

A Latin phrase meaning "all other things being equal," used in economics to analyze the effect of one variable on another, holding all other relevant factors constant.

Economic Model

A simplified representation of economic processes, used to analyze and make predictions about economic behavior.

Economic Policy

A set of principles and practices employed by government to influence the economy, involving decisions on taxation, government spending, and monetary issues.