FIN3702
Assignment 2 2021
792728
, QUESTION 1
Taffy Bags was extended credit terms of 2/10 net 60. The approximate cost of giving up the
cash discount, assuming a 365-day year is …
1. 6.10%.
2. 7.20%.
3. 12.20%.
4. 14.90%.
Cash discount/100- cash discount x 365/N
2%/100-2% x 365/(60-10) = 14.89%
Assignment 2 2021
792728
, QUESTION 1
Taffy Bags was extended credit terms of 2/10 net 60. The approximate cost of giving up the
cash discount, assuming a 365-day year is …
1. 6.10%.
2. 7.20%.
3. 12.20%.
4. 14.90%.
Cash discount/100- cash discount x 365/N
2%/100-2% x 365/(60-10) = 14.89%