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    Noah91399's Avatar
    Noah91399 Posts: 4, Reputation: 1
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    #1

    Feb 6, 2007, 08:45 AM
    Mechandising of invoice prices
    Merchandise with an invoice price of $4000 is purchased on June 2 subject to terms of 2/10, n/30, fob destination. Transportation costs paid by the seller totaled $150. What is the cost of the merchandise if paid by June 12, assuming the discount is taken?

    My answer is $3920 with the 20% discount
    Is this correct?

    Answers given are
    $4150
    $4070
    $4067
    $3920
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #2

    Feb 6, 2007, 09:47 PM
    Quote Originally Posted by Noah91399
    my answer is $3920 with the 20% discount
    is this correct?
    I agree it is $3,920 with an $80 discount.

    Except the discount rate is at 2%, not 20 :p

    But I know you know that, you just mistyped since you did get the correct answer.
    moussahawas's Avatar
    moussahawas Posts: 12, Reputation: 0
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    #3

    Feb 6, 2007, 11:39 PM
    Correct answer above. Nothing to say more, except clarifying one more thing.
    The terms 2/10, n/30, means that if you pay within 10 days, you get 20% discount, otherwise if not, then you have to pay within 30 days from the purchasement date.
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #4

    Feb 8, 2007, 10:05 PM
    Quote Originally Posted by moussahawas
    Correct answer above. Nothing to say more, except clarifying one more thing.
    The terms 2/10, n/30, means that if you pay within 10 days, you get 20% discount, otherwise if not, then you have to pay within 30 days from the purchasement date.
    No it does not.

    2/10, n/30 means that if you pay within 10 days, you get a 2% discount; otherwise, you MUST pay within 30 days.

    If you say the answer above is correct, why then was there only a 2% discount taken, and not 20%?
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