Cash Discounts and Invoice Payments
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Questions and Answers

What is the cash discount offered if the payment is made within 10 days?

  • 10% of the invoice amount
  • 5% of the invoice amount
  • 3% of the invoice amount (correct)
  • 2% of the invoice amount

    • What is the total amount the merchant must pay if the payment is not made within 10 days?

  • Rs.2684
  • Rs.2716
  • Rs.2800 (correct)
  • Rs.2724

    • If the merchant borrows money at 18% to pay the invoice on the 10th day, what is the profit the merchant can realize?

  • Rs.43.4
  • Rs.45.6
  • Rs.48.4 (correct)
  • Rs.49.4

    • If the merchant doesn't have money to pay for the invoice in 10 days, what is the highest simple interest rate at which he would be willing to borrow?

    <p>21.43%</p> Signup and view all the answers

    What is the effective cost of not taking the cash discount if the merchant pays the full amount on the 30th day?

    <p>3.33% of the invoice amount</p> Signup and view all the answers

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