The Cash Discount Terms "2/10, Net 30" Mean That

Multiple Choice

The cash discount terms "2/10, net 30" mean that:

A) the invoice is dated February 10 and must be paid by February 30.
B) the buyer will, in effect, be borrowing at a 36 percent annual interest rate if he takes 30 days to pay the invoice.
C) the buyer must make a 2 percent down payment-with the balance due in 10 to 30 days.
D) a 2 percent discount off the face value of the invoice is permitted if the bill is paid within 30 days.
E) None of these alternatives is correct.