When a seller offers a cash discount with terms of 5/10, n/30, this means payment is due in 5 days, or else there is a 30 percent late-payment penalty.

Question

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The terms 5/10, n/30 mean that the buyer can take a 5% discount if the invoice is paid within 10 days; otherwise, the net (full) amount is due within 30 days, with no mention of a late-payment penalty.

When a Seller Offers a Cash Discount with Terms of 5/10