Question: Butler Corp. purchases on average $ 1 , 0 0 0 , 0 0 0 worth of materials each day on credit terms of 3

Butler Corp. purchases on average $1,000,000 worth of materials each day on credit terms of 3/10, n /50. Butler always pays on day 50, never taking the discount. Butler does this because they do not collect from customers for about 50 days after their purchases. Butler could borrow money from a bank at a rate of 17%. Explain through computations why it might be better for Butler to borrow the money from the bank.

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