The Biscuit company has taken delivery of £10,000 of flour from its long-established supplier. Biscuit is in the habit of paying for flour deliveries 50 days after the invoice/delivery date. However, things are different this time: the supplier has introduced an early settlement discount of 2 per cent if the invoice is paid within 10 days. The rate of interest being charged on Biscuit's overdraft facility is 11 per cent per annum. You may assume no tax to avoid complications.
Required
Calculate whether Biscuit should pay on the 10th day or the 50th day following the invoice date.