A buyer of $7,000 in merchandise inventory failed to take advantage of the vendor's credit terms of 2/15, n/45, and instead paid the invoice in full at the end of 45 days. By not taking advantage of the cash discount, the buyer lost the discount of: a. 100
b. 77
c. 1155
d. 770
e. 231

Cash discount refers to an incentive that a seller offers toward a buyer in order to pay a bill before its time limit.In this, the seller will normally decrease the amount that the customer owes by either a modest percentage or a fixed monetary amount, and the further explanation can be defined as follows:

Given:

The credit terms are: When the discount with to paySo, the  price of the merchandise is:

Calculating the cash discount:

Therefore the answer is "140", and all the given choices are wrong.

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cash discount:

This sentence is false.

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