A firm grants credit with terms of 2/10, net 40. The firm\'s customers have ___

Question

A firm grants credit with terms of 2/10, net 40. The firm's customers have ___ days to pay in order to receive a _____ percent discount.

Select one:

a. 2; 10

b. 10; 40

c. 40; 2

d. 40; 10

e. 10; 2

Question 12

On May 11, you purchased $3,700 of merchandise from a supplier. The terms of the sale were 1/5, net 15. The discounted amount due is _____ which is payable no later than _____.

Select one:

a. $3,663; May 26

b. $3,515; May 16

c. $2,960; May 16

d. $3,515; May 26

e. $3,663; May 16

Question 13

Which one of the following is the need to hold cash simply as a financial reserve?

Select one:

a. Activity motive

b. Opportunistic motive

c. Precautionary motive

d. Speculative motive

e. Transaction motive

Question 14

Which one of the following would tend to create an unexpected increase in a firm's account's receivable period?

Select one:

a. Increased credit sales

b. Increased collection efforts

c. Increased dollar value per each sale

d. Increased customer delinquencies

e. The implementation of a cash discount

Question 15

Not yet answered

Fischer's Furniture sells 2,400 sofas a year at an average price per sofa of $1,250. The carrying cost per unit is $11.60. The company orders 80 sofas at a time and has a fixed order cost of $52 per order. The sofas are sold out before they are restocked. What is the economic order quantity?

Select one:

a. 162 sofas

b. 171 sofas

c. 188 sofas

d. 211 sofas

e. 147 sofas

Explanation / Answer

A firm grants credit with terms of 2/10, net 40. The firm's customers have ___ days to pay in order to receive a _____ percent discount.

Select one:

Ans : 2; 10

2 discount price = (3700)*(1-0.001) = 3663 and May 16

1% discount when paid with in 5 days = 11 may+5 day = 16 May

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