Author Question: A trade credit discount such as 2/10 net 40 means A) a 2 percent discount for payment within 10 ... (Read 286 times)

luminitza · **on:** Jul 10, 2018

A trade credit discount such as 2/10 net 40 means

A) a 2 percent discount for payment within 10 days, and a 3 percent penalty if payment is made
after 40 days.
B) a 2 percent penalty is due after 40 days.
C) a 2 percent discount if payment is made within 10 days, otherwise, the total amount is due in
40 days.
D) 10 percent discount for cash on delivery and a 2 percent discount for payment within 40 days.

Question 2

The value of a financial asset is the ________.

A) present value of all of the future cash flows that will be received
B) sum of all previous cash flows received
C) future value of just the capital gains but not the dividends
D) present value of just the capital gains but not the dividends

scikid · **Reply #1 on:** Jul 10, 2018

Answer to Question 1

C

Answer to Question 2

Answer: A
Explanation: A) The value, or price, of a financial asset is the present value of all of the future cash flows that you will receive while you maintain ownership of the asset. If you sell the asset, then your selling price becomes one of the future cash flows you receive.