A New York-based retailer purchases picnic hampers for $75,000 on November 1 and is given a cash discount of 3/10 net 30.If the invoice is paid on November 6,the retailer will:

Question

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The cash discount offered is 3% of the purchase price, which comes out to $2,250 ($75,000 x 0.03). If the retailer pays on November 6, within the discount period, they can take advantage of the cash discount and pay only $72,750 ($75,000 - $2,250). Therefore, the best choice is D - receive a cash discount of $2,250.

A New York-Based Retailer Purchases Picnic Hampers for $75,000 on November