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Fairweather Corporation Purchases Merchandise on Terms of 2/15, Net 40

Question 107

Multiple Choice

Fairweather Corporation purchases merchandise on terms of 2/15, net 40, and its gross purchases (i.e., purchases before taking off the discount) are $800,000 per year.What is the maximum dollar amount of costly trade credit the firm could get, assuming it abides by the supplier's credit terms? (Assume a 365-day year.)


A) $53,699
B) $56,384
C) $59,203
D) $62,163
E) $65,271

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