Outback Sporting Goods purchases merchandise on terms of 4/10, n/60. The company has a line of credit

Question:

Outback Sporting Goods purchases merchandise on terms of 4/10, n/60. The company has a that enables it to borrow money as needed from Northern Bank at an annual interest rate of 13 percent. Should Outback pay its suppliers within the 10-day discount period if it must draw on its (borrow from Northern Bank) to make these early payments? Explain.

Line of Credit
A line of credit (LOC) is a preset borrowing limit that can be used at any time. The borrower can take money out as needed until the limit is reached, and as money is repaid, it can be borrowed again in the case of an open line of credit. A LOC is...