Find what is cost of forgoing discount on other invoices

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Reference no: EM132758824

Problem 1: A firm purchases on credit. Credit terms require settlement by the end of the month following the month of invoicing, but a discount of 2% is offered for settlement within 7 days of invoicing. The firm decides to take the prompt settlement discount on all invoices received after the 20th day of the month. What is the cost of forgoing the discount on the other invoices (assuming an average credit period of 50 days)?

Select one:

A. 14.90%
B. 15.89%
C. 14.6%
D. 15.55%

Reference no: EM132758824

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