Question: MedSupplies currently sells surgical supplies to its customers on credit terms of 3/10, net 30. If MedSupplies changes its credit terms to 4/10, net 30, which of the following results is most likely to occur?
1) The periodic interest rate increases.
2) The approximate annual cost of trade credit decreases.
3) The net price of supplies increases.
4) The discount period decreases.
5) The amount of available free trade credit falls to zero.