25)

Which of the following describes factoring?

		Paying invoices promptly in order to take advantage of a cash discount
		Selling accounts receivable
		Pledging accounts receivable as collateral
		Paying off bonds prior to their maturity date.

27)

2/15 net 45 (or 2/15, n/45) translates as:

		15 percent cash discount if paid in 2 days, net 45-day credit period.
		45 percent of account due in 15 days, payment prior to day 15 receives a 2 percent discount.
		2 percent cash discount if paid prior to 15 days, if customer does not take a cash discount, the full balance is due in 45 days.
		2 percent of the balance is due in 15 days; the remaining balance is due in 45 days.

28)

Zoro Inc. purchased a new machine on October 20, 2010 for $1,000,000 on credit. The supplier has offered Zoro terms of 2/10, n/45. Zoros bank is currently lending funds at 8 percent. IF Zoro pays this invoice within the DISCOUNT period, what is the exact amount they will pay the supplier?

		$20,000
		$920,000
		$980,000
		$1,000,000
		$1,020,000

29)

Zoro Inc. purchased a new machine on October 20, 2010 for $1,000,000 on credit. The supplier has offered Zoro terms of 2/10, n/45. Zoros bank is currently lending funds at 8 percent. IF Zoro elects NOT to pay this invoice within the DISCOUNT period, what is the exact amount they should pay the supplier?

		$20,000
		$920,000
		$980,000
		$1,000,000
		$1,020,000