Question

A 2/10, net 30 credit policy: A) is an expensive form of short-term credit if a buyer forgoes the discount. B) provides cheap financing to the buyer for 30 days. C) is an inexpensive means of reducing the seller's collection period if every customer takes the discount. D) tends to have little effect on the seller's collection period. E) tends to increase the seller's investment in receivables as compared to a straight net 30 policy.

Answer 1

Answer: Is an expensive form of short-term credit if a buyer forgoes the discount.

Explanation:

2/10 net 30 credit policy is a form of trade credit that is being offered by a seller to a customer when there is a transaction for a particular good or service.

2/10 net 30 simply means that the customer will get a discount of 2% when he or she pays within 10 days, but the customer will pay the whole. amount when it's due in 30 days.

This policy is an expensive form of short-term credit if a buyer forgoes the discount.