Problem based on credit terms


Problem:

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Question: On September 1, a firm grants credit with terms of 2/10 net 45. The creditor:

must pay a penalty of 2% when payment is made later than September 1st.
must pay a penalty of 10% when payment is made later than 2 days after September 1st.
receives a discount of 2% when payment is made at least 10 days before September 1st.
receives a discount of 2% when payment is made before September 1st and pays a penalty of 10% if payment is made after September 1st.
receives a discount of 2% when payment is made within 10 days after the effective invoice date of September 1st.

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Finance Basics: Problem based on credit terms
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