Question: A supplier has offered your company a 1% discount for all bills that are paid 15 days after they are billed. The bills would normally

A supplier has offered your company a 1% discount for all bills that are paid 15 days after they are billed. The bills would normally be due 45 days after they are billed. What is the return on paying the bills early? If your company can borrow funds from a at a yield of 13%, is it financially attractive to pay the bills early? The requires a compensating balance.

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