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Suppose a Firm Purchases Goods on Credit with Terms of 3/10

Question 35

Multiple Choice

Suppose a firm purchases goods on credit with terms of 3/10, net 25. What is the cost of trade credit (APR) to the firm if it always pays its bill on Day 8 or sooner? In your computations, assume there are 360 days in a year. 


A) 74.23%
B) 24.74%
C) 44.54%
D) 0.00%
E) 111.34%

Correct Answer:

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