Kirk Development Buys on Terms of 2/15,net 60 Days

Multiple Choice

Kirk Development buys on terms of 2/15,net 60 days.It does not take discounts,and it typically pays on time,60 days after the invoice date.Net purchases amount to $650,000 per year.On average,what is the dollar amount of total trade credit (costly + free) the firm receives during the year,i.e. ,what are its average accounts payable? (Assume a 365-day year,and note that purchases are net of discounts. )

A) $106,849
B) $125,014
C) $117,534
D) $123,945
E) $107,918