Block Ltd's main supplier offers them credit terms of 2/10 net 30. They recently purchased $30,000 worth
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Block Ltd's main supplier offers them credit terms of 2/10 net 30. They recently purchased $30,000 worth of raw material and, as the company does not have sufficient cash to take advantage of the discount, they are considering borrowing the funds from one of their banks in order to do so.
BCIC is willing to lend the company the funds for 30 days at a cost of $400.
Bank of Montreal is offering a discounted loan for 30 days at a cost of $380.
Required: Advise the company on what action they should take.
Related Book For
Fundamentals of Financial Management
ISBN: 978-0324597707
12th edition
Authors: Eugene F. Brigham, Joel F. Houston
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