Tangshan Mining was extended credit terms of 3/15 net 30 EOM. The cost of giving up the cash discount, assuming payment would be made on the last day of the credit period, would be _________. If the firm were able to stretch its accounts payable to 60 days without damaging its credit rating, the cost of giving up the cash discount would only be _________.
A. 72.99%; 18.81%.
B. 72.99%; 18.25%.
C. 75.25%; 21.90%.
D. 75.25%; 22.58%.
Answer:D
Tangshan Mining was extended credit terms of 3/15 net 30 EOM. The cost of giving up the cash discount, assuming payment would be made on the last day of the credit period, would be _________. If the firm were able to stretch its accounts payable to 60 days without damaging its credit rating, the cost of giving up the cash discount would only be _________.
A. 72.99%; 18.81%. B. 72.99%; 18.25%. C. 75.25%; 21.90%. D. 75.25%; 22.58%.