Treasury Knowledge Quiz

Question 1 of 24

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A cash manager must decide whether to pay a $100,000 invoice on the 10th day after it is due and receive a 2% discount or to forgo the discount and pay the invoice on the 40th day after it is due and in the interim use the funds for a short-term investment. Approximately what yield must be generated on the short-term investment to make it profitable not to take the discount?

a)		6%
b)		12%
c)		19%
d)		25%

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Question 3-2