Baker Industries offers credit terms of 2/20,net 60 to Charlie Co.Charlie Co.has an inventory period of 15 days and an operating cycle of 45 days.Given this,which of the following statements are correct?
I.The credit terms of Baker Industries are too restrictive.
II.If Charlie Co.forgoes the discount on its purchases,it will have a negative cash cycle.
III.Baker Industries is financing the accounts receivable of Charlie Co.
IV.If Charlie Co.is delinquent in its payment,Baker Industries should be concerned.
A) I,III and IV only
B) I and II only
C) I,II,III and IV
D) II,III and IV only
E) III and IV only
Correct Answer:
Verified
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