A material supplier offers a 2% discount for payment within 10 days, with full payment due in 30 days (2/10 net 30). For a $50,000 material purchase, what is the effective annual interest rate of this discount?
Correct Answer
D) 36.7%
Discount = $50,000 × 0.02 = $1,000. Period = 30 - 10 = 20 days. Rate per period = $1,000 ÷ $49,000 = 2.04%. Annual rate = 2.04% × (365 ÷ 20) = 37.2%, closest to 36.7%.
Why This Is the Correct Answer
Discount = $50,000 × 0.02 = $1,000. Period = 30 - 10 = 20 days. Rate per period = $1,000 ÷ $49,000 = 2.04%. Annual rate = 2.04% × (365 ÷ 20) = 37.2%, closest to 36.7%.
More NASCLA Questions
How long should daily reports and project correspondence typically be retained after project completion?
Which AIA document contains the general conditions that govern the rights and responsibilities of all parties in a construction contract?
A construction company has direct labor costs of $85,000, direct materials of $120,000, and overhead costs of $45,000 for a project. What is the total job cost?
What is the primary purpose of job cost accounting in construction?
A construction company has current assets of $350,000 and current liabilities of $280,000. What is the company's working capital?
In CSI MasterFormat, which division covers earthwork and site preparation?
On an electrical plan, a rectangle with three parallel lines inside typically represents:
In a mechanical drawing, what does 'CFM' typically measure?
In CSI MasterFormat Division 08, which of the following would typically be included?
On a mechanical plan, what does the symbol 'RTU' typically indicate?
People Also Study
Business & Financial Management
120 questions · 70% to pass
Contract Administration
60 questions · 70% to pass
Project Management
60 questions · 70% to pass
Related Study Resources
Previous Question
A general contractor has direct costs of $850,000, overhead costs of $127,500, and wants a 12% profit margin on total costs. What should be the contract price?
Next Question
A built-up roof system requires 4 plies of felt with hot asphalt. If the roof area is 8,500 square feet and asphalt coverage is 25 pounds per 100 square feet per ply, how many pounds of asphalt are needed?