You will use the following information to answer two questions. Memorial Hospital purchases $10,000,000 in medical supplies
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Question:
You will use the following information to answer two questions.
Memorial Hospital purchases $10,000,000 in medical supplies from Consolidate Supplies. The terms of purchases are 3/10 net 30. Currently Memorial is paying Consolidated the full amount due on day 30 but is considering taking the discount by paying on day 10. Memorial can obtain a bank loan with a 8% annual interest rate.
Should Memorial replace the trade credit with the bank loan? Why or why not?
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