$1\mathrm{.}1$

REQUIRED

Study the information provided below and determine whether Neston Traders should borrow the cash to settle

the account. Motivate your answer by calculating the cost of forfeiting the discount $($expressed as a

percentage to two decimal places$).$

$(5$ marks$)$

INFORMATION

Neston Traders purchased inventory on credit for R$30000.$ The supplier offered Neston Traders the option

to settle the account by paying R$28800$ up to $10$ days after the sale or pay R$30000$ by the end of $60$ days.

Neston Traders can borrow cash from its bank at a rate of $18$ percent per annum to settle the account within

$10$ days.