The company has always followed the policy to take any cash discounts on goods purchased. Recently,...

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The company has always followed the policy to take any cash discounts on goods purchased. Recently, the company purchased a large amount of raw materials at a price of $875,000 with terms 1/10, n/40 on which it took the discount. Carla has recently estimated its cost of funds at 10%. Should Carla continue this policy of always taking the cash discount? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 2 decimal places, e.g. 12.25%.) Annual interest Carla continue the policy. % The company has always followed the policy to take any cash discounts on goods purchased. Recently, the company purchased a large amount of raw materials at a price of $875,000 with terms 1/10, n/40 on which it took the discount. Carla has recently estimated its cost of funds at 10%. Should Carla continue this policy of always taking the cash discount? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 2 decimal places, e.g. 12.25%.) Annual interest Carla continue the policy. %

Answer rating: 100% (QA)

To determine whether Carla should continue taking cash discountswe need to compare the discount rece... View the full answer