Final answer:
The statement that a 2 percent discount is allowed on payments made within 10 days under the terms 2/10, net 30 is true. This reflects common business and accounting practices which can influence financial decisions and cash flow.
Step-by-step explanation:
The term 2/10, net 30 is indeed a payment condition offered by sellers to buyers, indicating that a buyer can take a 2 percent discount on the invoice amount if payment is made within 10 days; otherwise, the full invoice amount is due within 30 days. Therefore, the statement that a 2 percent discount is allowed on payments made within the 10 days discount period is true. Understanding such terms is crucial in business and accounting practices, as it can impact both cash flow and profits.
When evaluating the cost of funding or the benefits of early payment discounts, businesses often use calculations such as the present value of future cash flows. For instance, with the example of the two-year bond issued at 3,000 dollars with an 8 percent interest rate, one can calculate the present value using the appropriate discount rate.
When the discount rate changes, the present value of future payments from the bond would also change. This is very important for anyone involved in financial decision-making, as it helps assess the impact of changing interest rates on investments.