Math
Which is generally a better credit term?
(a) 2 / 20 (b) 1 / 20 (c) 2 / 10 (d) 3 / 10 (e) 1 / 10
I am thinking its either b or e cause its 1 outta something and the others are 2 or 3 outta something so im not for sure how to figure out which is generally a better credit term so can someone please help me on that to figure it out i would greatly appreciate it.
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Answers
The better credit term between these choices is Option B, 1/20. This means that you will receive a 1% discount if you pay your invoice within 20 days. Option E, 1/10, is also a relatively good option, but you will only receive the 1% discount for paying your invoice within 10 days. Options A, C, and D all have a higher discount for early payment, however, the payment window is much shorter. A 2/20 or 3/10 payment window can be difficult to meet for some businesses, making Options B and E the better choice.
